Issues of relevance and privilege arise in answering the question whether common−interest agreements are discoverable. One federal court recently rejected discovery of three defendants’ common−interest agreement, and did so even though the three defendants had adverse interests that “may lead to future litigation between them.” Wausau Underwriters Ins. Co. v. Reliable Transp. Specialists, Inc., 2018 WL 4235077 (ED MI Sept. 6, 2018). You may read the Magistrate Judge’s opinion here, and the District Judge’s affirmance here.
Wausau Underwriters sued Reliable Transportation Specialists, Amarillo Ushe, and Burt Holt seeking a declaration that it did not have to pay a judgment arising from Holt’s lawsuit and ultimate $8.7M judgment against Reliable and Ushe. The three defendants entered into a “Common Interest Confidentiality Agreement” that contained “boilerplate terms” so that they could “safely share information.”
Wausau thought that the CIA contained provisions regarding tolling, settlement, indemnification, and related financial provisions. Wausau asked for the CIA, the defendants politely declined, and Wausau filed a motion to compel. The Court, without much explanation, required the defendants to submit the CIA for in camera review.
Are CIAs Privileged?
This is an interesting question, and one I will address in a future post. At oral argument, the defendants “insisted” that the “joint defense privilege” renders the CIA non-discoverable. The court sidestepped the inquiry, noting that “cases addressing the question of whether JDAs are privileged fall, quite frankly, all over the lot.” (Quoting Steuben Foods, Inc. v. GEA Process Eng’g, Inc., 2016 WL 1238785 (WDNY Mar. 30, 2016)).
The Court did not have to decide the privilege issue because the discovery of a CIA turned on relevance.