Ambac Assurance Corp. v. Countrywide Home Loans, Inc., No. 651612/10
(N.Y. App. Div. 1st Dep’t Dec. 4, 2014) (common-interest privilege applied to acquisition parties’ pre-closing communications even without related pending or anticipated litigation).
Historically, New York courts took a narrow view of the common-interest doctrine—permitting third parties to share in attorney/client communications without destroying confidentiality privilege only with respect to communications in pending or reasonably anticipated litigation. Recognizing that parties to a deal often must share legal advice regarding key interests prior to consummating a transaction, the New York Appellate Court held that pending or reasonably anticipated litigation was not a necessary element of the common-interest privilege. The purpose of furthering a legal interest or strategy common to the parties is sufficient for application of the doctrine in New York (similar to the approach applied in many federal courts and Delaware state court). Specifically, the Court held that “two business entities, having signed a merger agreement without contemplating litigation, and having signed a confidentiality agreement, required the shared advice of counsel in order to accurately navigate the complex legal and regulatory process involved in completing the transaction.”