An interesting privilege issue maneuvered through the NC court system—does a contract’s indemnification provision create an attorney–client relationship between a law firm, indemnitee, and a non-party indemnitor so that the privilege protects communications between the indemnitor and indemnitee?
In a decision that I profiled in this post, the NC Court of Appeals held that the indemnification clause created a business—not legal—interest between the indemnitor and indemnitee, and therefore the common–interest doctrine did not protect their communications from discovery.
But the NC Supreme Court reversed, ruling that an indemnification agreement creates a common legal interest between an indemnitor and indemnitee because “the indemnitor contractually shares in the indemnitee’s legal well-being.” This common interest creates a tripartite attorney–client relationship between the indemnitee, indemnitor, and their defense counsel. Friday Investments, LLC v. Bally Total Fitness of the Mid-Atlantic, Inc., 2017 WL 5016625 (N.C. Nov. 3, 2017). You may read the decision here. More…
As in-house counsel or outside corporate counsel, how would you handle this situation? Two employees download your corporate client’s proprietary information about Product X, join a competitor, and—surprise—a similar Product X from the competitor hits the market just a few months later.
Your client conducts a forensic investigation and discovers irrefutable evidence of the employees’ theft. Sure, you may file a civil action for trade-secrets misappropriation, but your client wants the employees criminally prosecuted.
Should you disclose the investigator’s report to the U.S. Attorney’s Office to aid the prosecution? Would that limited disclosure result in privilege waiver in the parallel civil case? Isn’t there some type of privilege-sharing doctrine, such as a so-called joint–prosecution privilege, or even the common–interest doctrine that would prevent privilege waiver? More…
In the ongoing trade-secrets litigation between Waymo and Uber over the alleged theft of self-driving car technology, a federal court rejected Uber’s claim that the attorney–client privilege and/or common–interest doctrine protected an investigator’s due diligence report. I discussed the Uber–Ottomotto acquisition backstory and the court’s privilege ruling in a prior post: Uber Loses Crucial Privilege Battle in Driverless Car Trade-Secrets Case.
In this piece, I discuss common–interest doctrine in more detail and explain court’s additional ruling that the work-product doctrine did not protect the due diligence report from disclosure to Waymo. Waymo LLC v. Uber Techs., Inc., 2017 WL 2694191 (N.D. Cal. June 21, 2017). You may read the magistrate judge’s opinion here, and the district court’s affirming order here.
Disclosure to Adversary Equals Waiver
Recall that Uber and Otto entered into a Term Sheet that described a process through which Uber may acquire Otto, and that the Term Sheet required Uber and Otto to jointly retain an investigation firm (Stroz Friedberg) to conduct due diligence into potential trade-secrets misappropriation. You may read Stroz’s engagement letter here. More…