January 4, 2017
Judge Rejects M&A Joint Defense Privilege
This K&L Gates memo highlights a DC federal court’s decision to reject claims that a joint defense privilege protected certain sensitive emails exchanged by the buyer and seller in connection with a proposed merger. The court found that the emails – which were sought by the Antitrust Division of the DOJ – did not satisfy the standards for the joint defense privilege.
The court found that documents expressing disagreements between the two companies about how the merged entities would operate were not privileged because they were not related to the parties’ common interest or made in furtherance of that interest. The memo points out that the case demonstrates the need for the parties to joint defense agreements to appreciate their limits. Here’s an excerpt:
The privilege not to disclose shared information between parties to a joint defense agreement is limited to communications: (1) on subjects about which the parties have a common interest; (2) relating to an actual or potential litigation; (3) related to the parties’ common interest; and (4) made in furtherance of that common interest. Shared communications that don’t meet these criteria are potentially subject to disclosure despite the existence of a joint defense agreement.
Be sure to check out our “Privilege Issues in M&A” webcast on January 19th for more on this important topic.
– John Jenkins