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Eyes Wide Shut: How Ignorance of the Common Interest Doctrine Can Compromise Informed Consent

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Eyes Wide Shut: How Ignorance of the Common Interest Doctrine Can Compromise Informed Consent University of Michigan Journal of Law Reform Volume 42 2008 Eyes Wide Shut: How Ignorance of the Common Interest Doctrine Can Compromise Informed Consent Katharine Traylor Schaffzin University of North Dakota School of Law Follow this and additional works at: https://repository.law.umich.edu/mjlr Part of the Evidence Commons, Legal Profession Commons, and the Litigation Commons Recommended Citation Katharine T. Schaffzin, Eyes Wide Shut: How Ignorance of the Common Interest Doctrine Can Compromise Informed Consent, 42 U. MICH. J. L. REFORM 71 (2008). Available at: https://repository.law.umich.edu/mjlr/vol42/iss1/3 This Article is brought to you for free and open access by the University of Michigan Journal of Law Reform at University of Michigan Law School Scholarship Repository. It has been accepted for inclusion in University of Michigan Journal of Law Reform by an authorized editor of University of Michigan Law School Scholarship Repository. For more information, please contact [email protected]. EYES WIDE SHUT: HOW IGNORANCE OF THE COMMON INTEREST DOCTRINE CAN COMPROMISE INFORMED CONSENT Katharine Traylor Schaffzin* I. INTRODUCTION Oscar Wilde said, "I can resist anything except temptation."' Many clients may agree. They may be tempted to jump into a common interest arrangement with strange bedfellows to gain the advantages that information-sharing provides. Attorneys, nonethe- less, must make sure that when they jump, their clients do so with both eyes open. The potential that the common interest doctrine may provide a client with advantages in current litigation renders it a very attrac- tive tool from a client's perspective. The common interest doctrine is an evidentiary mechanism permitting independent clients with a common legal interest to share attorney-client privileged informa- tion with each other without waiving that privilege. Through informal aggregation of common interests, an attorney represent- ing one client assumes certain obligations to other members of a common interest group, which members are represented by their own attorneys, to advance the interests of her own client. The at- torney achieves this by implementing a strategy advancing the legal interests common to the group. Such aggregation may result in faster, more efficient litigation because at least two parties are shar- ing resources and information, obtaining results at a faster rate * Katharine Traylor Schaffzin is an Assistant Professor of Law at the University of North Dakota School of Law. I would like to thank Meredith Miller and Sheila Scheuerman for their helpful comments on this Article and their useful insights on the ideas expressed therein. I also wish to thank Eeva Greenley for her excellent research assistance. 1. OSCAR WILDE, LADY WINDERMERE'S FAN 6 (Methuen 1985). 2. See, e.g., In re Grand Jury Subpoenas, 89-3 & 894, John Doe 89-129, 902 F.2d 244, 249 (4th Cir. 1990) (quoting United States v. Schwimmer, 892 F.2d 237, 243-44 (2d Cir. 1989)); Sedlacek v. Morgan Whitney Trading Group, Inc., 795 F. Supp. 329, 331 (C.D. Cal. 1992) (quoting In 7e Grand Jury Subpoenas, 89-3 & 89-4, 902 F.2d at 249); Schachar v. Am. Acad. of Ophthalmology, Inc., 106 F.R.D. 187,191-92 (N.D. Ill. 1985); Duplan Corp. v. Deer- ing Milliken, Inc., 397 F. Supp. 1146, 1175 (D.S.C. 1975); James M. Fischer, The Attorney- Client Privilege Meets the Common Interest Arrangement: Protecting Confidences While Exchanging Informationfor Mutual Gain, 16 REv. LITIG. 631, 632 (1997). See infra Part IIA for a detailed discussion of the common interest doctrine. 3. See, e.g., In re Grand Jury Subpoenas, 89-3 & 89-4, 902 F.2d at 249 (quoting Schuim- met, 892 F.2d at 243); Sedlacek, 795 F. Supp. at 331 (quoting In re GrandJury Subpoenas, 89-3 & 89-4, 902 F.2d at 249); Schachar, 106 F.R.D. at 191-92; Duplan Corp., 397 E Supp. at 1175; Visual Scene, Inc. v. Pilkington Bros., 508 So. 2d 437, 440-41 (Fla. Dist. Ct. App. 1987). 72 University of MichiganJournal of Law Reform [VOL. 42:1 and for a lower cost.4 It may also lead to the discovery5 of otherwise undiscoverable information useful to the client. In addition to its potential advantages, informal aggregation under the common interest doctrine also creates pseudo-attorney- client relationships between the attorney for one client and the other members of the common interest group-the "pseudo- clients"-the boundaries of which are not clearly defined. These pseudo-attorney-client relationships obligate the attorney to consider the interests of pseudo-clients in addition to those of the original client.7 Should the interests of the client and the pseudo- client conflict in the future, the attorney may be required to withdraw from representing the client, thus depriving the client of his choice of counsel.' 4. Arnold Rochvarg, Joint Defense Agreements and Disqualificationof Co-Defendant's Coun- sel 22 AM.J. TRIAL ADVOC. 311, 312 (1998). See also, Schachar,106 F.R.D. at 191-92; Joan K. Archer, Joint Defense/Common Interest Privilege in Kansas,J. KAN. B. Ass'N, Feb. 2006, at 20, 20 ("The privilege has been embraced because it provides great value to the adversarial system. As one court explained, a joint defense provides defendants 'a pooling of resources, a healthy exchange of vital information, a united front against a common litigious foe, and the marshaling of legal talent and advice.'") (quoting Lugosh v. Congel, 219 F.R.D. 220, 236 n.10 (N.D.N.Y. 2003)); Howard M. Erichson, Informal Aggregation: Proceduraland EthicalImpli- cations of Coordination Among Counsel in Related Lawsuits, 50 DuKE L.J. 381, 386-88 (2000); Mitchell A. Lowenthal & Howard M. Erichson, Modern Mass Tort Litigation, Prior-Action Deposi- tions and Practice-Sensitive Procedure, 63 FORDHAM L. Rxv. 989, 1000 (1995) (quoting ATLA Guide to Litigation Groups, TRIAL, July 1991, at S1, S2). 5. See infra note 25 for further explanation. 6. Courts in various jurisdictions disagree in defining the boundaries of the relation- ship between an attorney and a pseudo-client. Compare Wilson P. Abraham Constr. Corp. v. Armco Steel Corp., 559 F.2d 250, 253 (5th Cir. 1977) (recognizing that implied attorney- client relationship may exist between attorney and pseudo-client); City of Kalamazoo v. Michigan Disposal Serv. Corp., 125 F. Supp. 2d 219, 232 (W.D. Mich. 2000), aff'd 151 F. Supp. 2d 913 (W.D. Mich. 2001) (finding direct attorney-client relationship between attor- ney and pseudo-client); Essex Chem. Corp. v. Hartford Accident & Indem. Co., 993 E Supp. 241, 252-53 (D.N.J. 1998) (recognizing that an implied attorney-client relationship may exist between attorney and pseudo-client); Ageloff v. Noranda, Inc., 936 F. Supp. 72, 75-76 (D.R.I. 1996) (same); GTE N., Inc. v. Apache Prods. Co., 914 F. Supp. 1575, 1581 (N.D. Ill. 1996) (finding implied attorney-client relationship between attorney and pseudo-client); with Turner v. Firestone Tire & Rubber Co., 896 F. Supp. 651, 654 (E.D. Tex. 1995) (recog- nizing that fiduciary relationship may exist between attorney and pseudo-client); ABA Comm. on Ethics and Prof'l Responsibility, Formal Op. 395 (1995) (determining that no attorney-client relationship exists between attorney and pseudo-client, although fiduciary relationship may exist). See infra Part I.B for a detailed discussion of the relationship cre- ated between an attorney and a pseudo-client and the boundaries thereof. 7. E.g., Abraham Constr., 559 F.2d at 253 (finding that attorney may owe to pseudo- client all duties owed by attorney to client or some other fiduciary duty); Kalamazoo, 125 F. Supp. 2d at 245 (finding that attorney owes to pseudo-client all duties owed by attorney to client); GT N., 914 F. Supp. at 1581 (same); ABA Comm. on Ethics and Prof'l Responsibil- it), Formal Op. 395 (noting that attorney may owe pseudo-client fiduciary duties). See infra Part II.B for a detailed discussion of the obligations an attorney owes to a pseudo-client. 8. See infra Part 1II.B for a discussion of the possibility of attorney withdrawal and the effects thereof on the client's choice of counsel. FALL 2008] Eyes Wide Shut Consider, for example, the following scenario: Acme Develop- ment Company and Beta Land Trust are real estate development companies in the City of Xylon. Both Acme and Beta have signifi- cant undeveloped land holdings within Xylon, which they plan to develop in the future. Xylon has seized several acres of undevel- oped land held by Acme, Beta, and others, under its eminent domain powers. Acme and Beta believe that their land was seized as part of a larger unconstitutional effort on the part of Xylon to create a commercial development that would generate greater taxes for the city than the undeveloped land currently garners. Both Acme, through Attorney Arnot, and Beta, through Attorney Bellows, have initiated separate claims against Xylon challenging the takings. Attorneys Arnot and Bellows seek to cooperate with each other by entering into a common interest agreement to more efficiently develop their clients' separate actions against Xylon. At this point in the hypothetical, there are only two attorney- client relationships: the first, between Attorney Arnot and Acme, and the second, between Attorney Bellows and Beta. Before enter- ing into any concerted effort against Xylon, Attorneys Arnot and Bellows owe only their respective clients the duties of diligence, confidentiality, and loyalty.9 Attorney Arnot owes no duty to Beta as a client and Attorney Bellows owes no duty to Acme as a client.' ° To further the interests of their respective clients through pooled information, resources, and strategies, Attorneys Arnot and Bellows enter into a common interest arrangement on behalf of their clients to bring the independent claims of Acme and Beta against Xylon.
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