What you need to know and what remains to be settled
By Andy Davis and Connor Shaull
Common interest agreements have long been used by Minnesota practitioners to share otherwise privileged information among parties with a common interest. It therefore came as a surprise to many Minnesota lawyers to learn recently that Minnesota was among a small group of states that had not adopted the common interest doctrine.1
That changed with the Minnesota Supreme Court’s recent decision in Energy Policy Advocates v. Ellison.2 In that case, the Court formally recognized the common interest doctrine, announcing a six-part test to determine whether and under what circumstances the doctrine applies.
All federal appellate courts, and most states—including, at long last, Minnesota—have now recognized the doctrine. Yet despite its wide acceptance, the common interest doctrine varies in important ways across jurisdictions.
And while the Minnesota Supreme Court has provided needed clarity regarding the existence and scope of the doctrine in Minnesota, application of the doctrine will necessarily be case-specific, with a number of issues likely to be litigated following the Court’s decision. Ultimately, it will be up to trial courts to work through those issues and further define the scope of the doctrine in Minnesota.
A very brief history of the common interest doctrine in federal and state courts
The common interest doctrine3 was developed by courts to solve a frequent problem among co-counsel in litigation: How can privileged information be shared between parties with a common interest to advance those parties’ respective positions in litigation, without also waiving the privilege as a result of the disclosure beyond the narrow confines of the attorney-client relationship? The common interest doctrine thus created an exception to the general rule of waiver, permitting parties to share privileged information outside the attorney-client umbrella without risking waiver, so long as certain conditions are met.
Generally, the common interest doctrine applies to privileged communications made in furtherance of a common interest that is legal in nature.4 The Federal Rules of Evidence do not address the doctrine, but Proposed Rule 503(b) applies the attorney-client privilege to communications made “by the client or the client’s lawyer to a lawyer representing another in a matter of common interest.”
This broad formulation has not been adopted by Congress, but federal courts often rely on the proposed rule when analyzing privilege.5 Many state courts have also modeled their common interest doctrines after Proposed Rule 503(b).6 For example, Delaware Rule of Evidence 502(b)(3) extends the attorney-client privilege to communications made “by the client... or the client’s lawyer... to a lawyer... representing another in a matter of common interest….”
On its face, the Proposed Rule 503(b) approach appears broad in scope. It requires that the shared interest be legal in nature; it requires an identity of interests; and it does not require a written common interest agreement.
The Restatement of Law Governing Lawyers takes a similarly broad approach. It extends the doctrine beyond traditional litigation to non-litigated matters and interests that are legal, factual, or strategic in character.7
Even under these broad approaches, however, courts have narrowed the doctrine in unique ways. For example, Delaware itself has declined to apply the common interest doctrine to communications that deal primarily with business interests.8
States that have not modeled their common interest doctrines after Proposed Rule 503(b) have also taken varying approaches to the doctrine. For example, states like California9 and Massachusetts10 do not require active litigation—that is, the common interest doctrine can apply in a transactional or regulatory context when active litigation is not contemplated. On the other hand, New York11 and New Jersey12 have required pending or reasonably anticipated litigation in order for the common interest doctrine to apply. At least one state, Texas, even more restrictively requires ongoing litigation.13
These differing approaches to the doctrine turn on several key issues: which interests are “legal”; whether a communication is “in furtherance of” the interest; whether active litigation is required; and how close the shared interest between the communicants must be.
The common interest doctrine in Minnesota
Prior to the Minnesota Supreme Court’s decision in Energy Policy Advocates v. Ellison, the Minnesota Court of Appeals twice declined to recognize the common interest doctrine.
First, in September 2020 the Minnesota Court of Appeals, in Walmart Inc. v. Anoka County, stated that Minnesota had not expressly adopted the doctrine.14 There, the court assessed whether the Anoka County attorney waived the work-product protection by sharing a legal presentation relating to tax appeals with other county attorneys.15 The court observed that Minnesota had not expressly adopted the doctrine.16 Therefore, the court looked to other jurisdictions’ definitions of the doctrine, including the Eighth Circuit,17 Seventh Circuit,18 D.C. Circuit,19 and New Jersey Supreme Court.20 Under each version, the court concluded that the doctrine was inapplicable because the county had allowed the presentation to be accessed by numerous individuals who did not share the interest of defending tax appeals, and because adequate safeguards did not exist to ensure that the presentation was not disclosed to adverse parties.21 Still, the court did not address whether the exception “has been or should be adopted in Minnesota.”22
Second, the court of appeals, in Energy Policy Advocates v. Ellison, concluded that Minnesota had not recognized the common interest doctrine.23 The court noted that “the task of extending existing law falls to the supreme court or the legislature, but it does not fall to this court,”24 and thus held that “the district court erred by applying the common-interest doctrine” to certain documents disclosed by the Attorney General’s Office to other parties.25
These two court of appeals decisions created uncertainty for Minnesota practitioners, most of whom assumed the doctrine applied in Minnesota and have long shared communications pursuant to joint defense and common interest agreements.
The adoption of the common interest doctrine in Energy Policy Advocates v. Ellison
The Minnesota Supreme Court unanimously recognized the common interest doctrine in Energy Policy Advocates v. Ellison,26 providing needed clarity on this issue. In announcing the doctrine, the Court relied heavily on the Eighth Circuit’s decision in In re Grand Jury Subpoena Duces Tecum,27 as well as the Minnesota federal district court’s decision in Shukh v. Seagate Tech., LLC28 and the Restatement’s variation of the common interest doctrine.29
Specifically, the Court laid out six elements that must be met for the doctrine to apply to either attorney-client privileged or work-product protected communications: “(1) two or more parties, (2) represented by separate lawyers, (3) have a common legal interest (4) in a litigated or non-litigated matter, (5) the parties agree to exchange information concerning the matter, and (6) they make an otherwise privileged communication in furtherance of formulating a joint legal strategy.”30
The Court noted that this formulation is “generally consistent with the common-interest doctrine’s requirements in the federal courts for Minnesota, as well as the Restatement.”31 The Court also held that the doctrine applies only to legal interests, but that application of the doctrine does not require litigation.32 While the Court did not define “legal interest,” its decision was clear that “purely commercial, political, or policy” interests are “insufficient for the common interest doctrine to apply.”33 Finally, the Court noted that the party asserting the doctrine has the burden of proving its application.34
Minnesota’s formulation takes a fairly broad approach to the common interest doctrine. Unlike more restrictive states such as Texas (which requires ongoing litigation for the doctrine to apply) or New York and New Jersey (which require pending or reasonably anticipated litigation), Minnesota does not require litigation for the doctrine to apply. Additionally, the Minnesota Supreme Court made clear that the doctrine applies equally to work-product protection and attorney-client privilege. And the Court relied on arguably broad variations (such as the Restatement’s approach) in its adoption. But the Court also imposed a critical limitation on the doctrine: The shared interest must be legal in nature, and cannot be “a purely commercial, political, or policy interest.”35
Key issues after Energy Policy Advocates
Energy Policy Advocates provides needed clarity regarding the existence and scope of the common interest doctrine in Minnesota. But in applying the doctrine, trial courts will need to address a number of key issues.
Is the common interest a “legal” interest?
A key question after Energy Policy Advocates is what constitutes a shared “legal” interest. According to the Court, a “legal” interest is not a “purely commercial, political, or policy interest.” But the Court went no further in drawing these lines.
Federal and state courts have split in their definition of “legal interest.” For example, a federal district court recently rejected the doctrine’s application to a group’s shared business interest and desire for the plaintiff to prevail,36 while California courts have noted that the doctrine may extend to interests far removed from traditional litigation, such as the desire to see a shopping center development succeed.37
In In re Grand Jury Subpoena Duces Tecum, which was relied on by the Court in Energy Policy Advocates, the Eighth Circuit recognized the doctrine, but declined to apply it based on the White House’s asserted interest in protecting Hillary Clinton’s “personal liberty.”38 This, the court found, was more in the nature of a political interest, and not a protectable legal interest.39 Adopting a similar approach, a federal district court found a sufficient common interest between parties negotiating a patent acquisition because the parties sought the patent’s validity, enforceability, and infringement.40
It remains to be seen how Minnesota courts will define “legal interests,” and how courts will address situations where a legal interest is intertwined with a commercial, policy, or other non-legal interest. A likely approach is that, following the law of privilege, Minnesota courts will evaluate which interest—legal, commercial, or policy—predominates in the communication.41
Is the communication “in furtherance of” the legal interest?
Another issue that was not addressed in Energy Policy Advocates concerns when a communication is “in furtherance of” of the common interest. Under the Court’s formulation, the communication must be “in furtherance of formulating a joint legal strategy.”42 A close nexus to the joint legal strategy could invite judicial scrutiny of the intent or purpose behind any particular communication made under a common interest agreement.
Federal courts have split on what constitutes “in furtherance of” of the common interest. Even where parties have sufficiently demonstrated the existence of a common interest, not every communication related to the common interest will be protected.
For example, in Gulf Islands Leasing, Inc. v. Bombardier Capital, Inc., a federal district court refused to apply the doctrine to communications concerning a business strategy—even though the communications shared concerns about litigation that were sufficient to invoke the doctrine.43
Thus, trial courts may scrutinize communications to determine whether they seek to further the common legal interest, or are instead furthering some other objective. The line between legal and non-legal objectives is likely to be blurred, and courts will need to draw that line based on the specific facts and circumstances of the communications at issue.
Is the underlying communication “otherwise privileged”?
Because the common interest doctrine is merely an exception to waiver, courts are clear that the doctrine does not stand alone and is not a separate privilege.44 The Minnesota Supreme Court’s decision is in agreement: For the common interest doctrine to apply, the shared communication must itself be attorney-client privileged or work-product protected.45 Therefore, the communications or documents the parties seek to protect from disclosure must satisfy the requirements of either the attorney-client privilege or the work-product doctrine.46
Interestingly, the minority of courts that have required the existence of litigation as a condition of the common interest doctrine effectively impose a requirement that the communication at issue be work-product protected. Such a narrow formulation would mean that attorney-client privileged communications, if shared under a common interest agreement but at a time when litigation was not contemplated or pending, would be waived. Fortunately, Energy Policy Advocates does not take such a narrow approach. Accordingly, co-counsel in Minnesota could enter into a common interest agreement for transactional or regulatory matters where litigation was not expressly contemplated, and still be protected as long as the communications are “otherwise privileged.”
The “otherwise privileged” requirement means counsel should carefully consider the nature of the communication before sharing it via a common interest agreement. The existence of a joint defense agreement or common interest agreement, by itself, does not confer any privileged status on a document or communication. Thus, routine correspondence that strays from a core legal purpose may not be protected from disclosure by the common interest doctrine, if a reviewing court were to carefully scrutinize the communication in question.
How close must the shared interest be?
A final issue not addressed by Energy Policy Advocates relates to the definition and alignment of the shared interest. Again, other courts have diverged in their application of the doctrine on this point. Some courts require that the interests be substantially the same,47 while others require interests to be identical.48 A third line of cases requires the interests to be “nearly identical.”49
Whether these are distinctions without a difference remains to be seen. But there is room for argument on either side. It is possible that co-parties to litigation have interests that are not sufficiently aligned. As one example, an insurer’s and insured’s interests may substantially change once it becomes apparent that the insured’s alleged actions would take the claim out of the applicable policy.
These and other questions will need to be clarified, likely in the trenches of district court litigation, and eventually, to the rarefied air of the appellate courts, where the rules of decision will crystallize.
Conclusion
At long last, and to the relief of many, Minnesota has joined the vast majority of states in formally recognizing and adopting the common interest doctrine. The Court’s decision in Energy Policy Advocates is a welcome development for Minnesota practitioners, and the Court’s formulation of the doctrine provides much needed clarity regarding when the doctrine applies.
But key issues will be litigated in the wake of the Energy Policy Advocates decision. When is the asserted interest “legal” in nature, and when it is a mere policy or commercial interest? What happens when those interests overlap or intertwine? When is a communication “in furtherance of” a joint legal interest, and when is it something else? How similar must parties’ interests be for the doctrine to apply? While Energy Policy Advocates has announced the broad contours of the common interest doctrine, it will be up to trial courts to address these issues and provide further definition.
ANDY DAVIS is a partner at Stinson LLP in Minneapolis, and is the deputy chair of the firm’s energy, environmental, mining, and transportation practice division. His practice focuses on complex litigation and regulatory matters in the areas of environmental, energy, and transportation law.
CONNOR SHAULL is a business litigation associate at Stinson LLP in Minneapolis. Shaull focuses his practice on matters involving a wide array of industries, including products-liability actions, general business, real estate, patent litigation, and employment.
Notes
1 Though the Minnesota Supreme Court expressly adopted the joint defense doctrine (applicable to parties represented by the same counsel), it had not addressed the broader common interest doctrine. See Schmitt v. Emery, 2 N.W.2d 413, 417 (Minn. 1942) (expressly adopting a joint defense privilege, not an all-encompassing common interest exception to waiver).
2 No. A20-1344, 2022 WL 4488489 (Minn. 9/28/2022).
3 The common interest doctrine is also known as the “common interest arrangement,” “common legal interest doctrine,” “joint litigant privilege,” “pooled information privilege,” “allied lawyer doctrine,” “community-of-interest privilege,” and “allied litigant privilege.” The common interest doctrine is an extension of the joint defense doctrine.
4 See Waymo LLC v. Uber Techs., Inc., 870 F.3d 1350, 1360 (Fed. Cir. 2017) (requiring a party to “demonstrate the elements of privilege and then… demonstrate that the communication was made in pursuit of common legal claims including common defenses”).
5 See, e.g., Citibank, N.A. v. Andros, 666 F.2d 1192, 1195 (8th Cir. 1981).
6 See, e.g., Alaska (ALASKA R. EVID. 503(B)(3)); Delaware (DEL. R. EVID. 502(b)(3)); Nebraska (NEB. REV. STAT. §27-503(2)(C) (West 2009)); Nevada (NEV. REV. STAT. §49.095(3) (West 2004)); New Mexico (N.M. R. EVID. 11-503(B)(3)); Oregon (OR. REV. STAT. §40.225(2)(C) (Supp. 2014)); Wisconsin (WIS. STAT. ANN. §905.03(2) (West Supp. 2013)).
7 Restatement (Third) of the Law Governing Lawyers §76, cmts. A–G (Am. Law Inst. 2000).
8 See Glassman v. Crossfit, Inc., No. 7717-VCG, 2012 WL 4859125, *3–4 (Del. Ch. 10/12/2012).
9 See Citizens for Ceres v. Super. Ct., 159 Cal. Rptr. 3d 789, 811 (Cal. Ct. App. 2013).
10 Hanover Ins. Co. v. Rapo & Jepsen Ins. Servs., Inc., 870 N.E.2d 1105, 1110, 1112 (Mass. 2007).
11 See Hyatt v. State of Cal. Franchise Tax Bd., 962 N.Y.S.2d 282, 295–97 (N.Y. App. Div. 2013).
12 See JNL Mgmt. LLC v. Hackensack Univ. Med. Ctr., No. 2:18-CV-5221-ES-SCM, 2019 WL 2315390, at *9 (D.N.J. 5/31/2019).
13 In re XL Specialty Ins. Co., 373 S.W.3d 46, 51–53 (Tex. 2012).
14 No. A19-1926, 2020 WL 5507884, at *2 (Minn. Ct. App. 9/14/2020).
15 Id.
16 Id.
17 Id. at *3 (citing In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 922 (8th Cir. 1997) (exception applies when “two or more clients with a common interest in a litigated or non-litigated matter are represented by separate lawyers and they agree to exchange information concerning the matter” (quotation omitted)).
18 Walmart Inc., 2020 WL 5507884, at *3 (citing United States v. BDO Seidman, LLP, 492 F.3d 806, 816 (7th Cir. 2007) (exception applies when “the parties undertake a joint effort with respect to a common legal interest” and is limited “to those communications made to further an ongoing enterprise”)).
19 Walmart Inc., 2020 WL 5507884, at *3 (citing United States v. Deloitte LLP, 610 F.3d 129, 140–41 (D.C. Cir. 2010) (work-product protection is waived when information is disclosed “to an adversary or a conduit to an adversary” and explaining existence of common interest could help determine “whether disclosing party had a reasonable basis for believing that the recipient would keep the disclosed material confidential”)).
20 Walmart Inc., 2020 WL 5507884, at *3 (citing O’Boyle v. Borough of Longport, 94 A.3d 299, 317 (N.J. 2014) (exception applies “to communications between attorneys for different parties if the disclosure is made due to actual or anticipated litigation for the purpose of furthering a common interest, and the disclosure is made in a manner to preserve the confidentiality of the disclosed material and to prevent disclosure to adverse parties”)).
21 Walmart Inc., 2020 WL 5507884, at *3.
22 Id. at *4.
23 Energy Pol’y Advocs. v. Ellison, 963 N.W.2d 485, 501 (Minn. Ct. App. 2021).
24 Id. (quoting Tereault v. Palmer, 413 N.W.2d 283, 286 (Minn. App. 1987)).
25 Energy Pol’y Advocs., 963 N.W.2d at 501.
26 No. A20-1344, 2022 WL 4488489, at *1 (Minn. 9/28/2022).
27 112 F.3d 910, 922 (8th Cir. 1997).
28 872 F. Supp. 2d 851, 855 (D. Minn. 2012).
29 Restatement (Third) of the Law Governing Lawyers §§76, 91 (Am. L. Inst. 2000).
30 Energy Pol’y Advocs., No. A20-1344, 2022 WL 4488489, at 4.
31 Id.
32 Id.
33 Id.
34 Id.
35 Id.
36 In re Dealer Mgmt. Sys. Antitrust Litig., 335 F.R.D. 510, 515 (N.D. Ill. 2020).
37 See Citizens for Ceres v. Super. Ct., 159 Cal. Rptr. 3d 789, 809-11 (Cal. Ct. App. 2013).
38 In re Grand Jury Subpoena Duces Tecum, 112 F.3d 910, 923 (8th Cir.1997).
39 Id.
40 Crane Sec. Techs., Inc. v. Rolling Optics, AB, 230 F. Supp. 3d 10, 20 (D. Mass. 2017).
41 In re Polaris, Inc., 967 N.W.2d 397, 407-08 (Minn. 2021) (adopting the predominant purpose test and holding that “when a document contains both legal advice and business advice, for the attorney-client privilege to apply to the document in its entirety, the predominant purpose of the communication must be legal advice”).
42 Energy Pol’y Advocs., No. A20-1344, 2022 WL 4488489, at 4.
43 215 F.R.D. 466, 471 (S.D.N.Y. 2003); see also Intex Recreation Corp. v. Team Worldwide Corp., 471 F. Supp. 2d 11, 16 (D.D.C. 2007) (rejecting the common interest doctrine for communications in pursuit of business or commercial interests).
44 See In re Pac. Pictures Corp., 679 F.3d 1121, 1129 (9th Cir. 2012).
45 Energy Pol’y Advocs., No. A20-1344, 2022 WL 4488489, at 4.
46 See In re Mod. Font Applications LLC, No. 2021-138, 2021 WL 1749755, at *2 (Fed. Cir. 5/4/2021).
47 See, e.g., United States v. Gonzalez, 669 F.3d 974, 980 (9th Cir. 2012); In re Teleglobe Commc’ns Corp., 493 F.3d 345, 365 (3d Cir. 2007) (requiring “at least a substantially similar legal interest”).
48 See, e.g., Frontier Refining, Inc. v. Gorman–Rupp Co., 136 F.3d 695, 705 (10th Cir.1998); Lawson v. Spirit AeroSystems, Inc., 410 F. Supp. 3d 1195, 1209 (D. Kan. 2019); United States v. Doe, 429 F.3d 450, 453 (3d Cir. 2005); Shamis v. Ambassador Factors Corp., 34 F. Supp. 2d 879, 893 (S.D.N.Y. 1999); Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1172 (D.S.C. 1974).
49 See, e.g., F.D.I.C. v. Ogden Corp., 202 F.3d 454, 461 (1st Cir. 2000); In re Fin. Oversight & Mgmt. Bd. for Puerto Rico, 390 F. Supp. 3d 311, 326 (D.P.R. 2019).