Summary
The Nevada Supreme Court adopted the common-interest rule as an exception to waiver of the work-product privilege. It held that a former corporate officer and intervening shareholder plaintiffs shared a sufficient common interest in litigation because they asserted similar derivative claims against the same defendants. The court granted a writ of prohibition and directed the district court to conduct an in camera review before compelling disclosure of the communications.
Topics
Practice areas
Questions Presented
- Whether sharing asserted work-product materials with third parties who have a common interest in litigation waives the work-product privilege.
- Whether Cotter and the intervening plaintiffs had a sufficiently strong common interest in litigation to invoke the common interest exception to waiver.
- Whether extraordinary writ relief was appropriate to review the district court's pretrial discovery order compelling disclosure of allegedly privileged communications.
Holdings
- Nevada adopts the common interest rule as an exception to waiver of the work-product privilege. Attorneys may share work product with third parties who anticipate litigation against a common adversary on the same issue or issues and have strong common interests in sharing trial-preparation materials, without waiving the privilege.
- Cotter and the intervening plaintiffs shared a sufficiently strong common interest in litigation because they were Reading shareholders pursuing similar derivative claims against the same defendants concerning breaches of fiduciary duty, and the intervening plaintiffs had not asserted claims against Cotter.
- Writ relief was appropriate because compelled disclosure of allegedly privileged communications would cause irreparable harm that could not be remedied by a later appeal. The district court must refrain from compelling disclosure until it conducts an in camera review and makes clear findings about whether the emails contain protected attorney work product.
Key quotations
“We take this opportunity to adopt the common interest rule as an exception to waiver of the work-product privilege.” (at 232)
“For the common interest rule to apply, the "transferor and transferee [must] anticipate litigation against a common adversary on the same issue or issues" and "have strong common interests in sharing the fruit of the trial preparation efforts."” (at 232)
“Accordingly, we grant petitioner's writ of prohibition and direct the clerk of this court to issue a writ instructing the district court to refrain from compelling disclosure of the emails until it reviews the emails in camera to evaluate whether they contain impressions, conclusions, opinions, and legal theories of counsel, as required pursuant to the work-product privilege.” (at 233)
Factual background
After Reading terminated James Cotter, he sued members of Reading's board for breach of fiduciary duty. Reading shareholders filed a derivative action against the same defendants involving Cotter's termination and related events, and the district court consolidated the actions. During discovery, Cotter asserted work-product protection over approximately 150 emails exchanged between his attorneys and counsel for the intervening plaintiffs; the district court ordered production after finding an insufficient showing of common interest, without reviewing the emails in camera.
Procedural history
James Cotter sued Reading directors for breach of fiduciary duty, and Reading shareholders separately filed a derivative action against the same defendants. The district court consolidated the actions and, without conducting an in camera review, ordered Cotter to produce approximately 150 emails exchanged between his counsel and counsel for the intervening plaintiffs. Cotter sought writ relief, and the Nevada Supreme Court granted a writ of prohibition.
Remand instructions
The district court must refrain from compelling disclosure of the emails until it conducts an in camera review and makes clear findings regarding whether the emails contain counsel's impressions, conclusions, opinions, and legal theories protected by the work-product privilege. The Nevada Supreme Court also lifted its prior stay.