Ambac Assurance Corporation v. Countrywide Home Loans, Inc., 27 N.Y.3d 616

Ambac sued Countrywide for fraud and breach related to mortgage-backed securities; Bank of America was later added based on its 2008 merger with Countrywide.
During the six-month pre-closing period (Jan–July 2008), Bank of America and Countrywide exchanged ~400 communications and logged them as attorney-client privileged.
Communications related to pre-closing legal matters (disclosures, regulatory approvals, tax, employee benefits); merger agreement directed parties to share privileged information and maintain confidentiality.
Ambac moved to compel production, arguing the parties waived privilege because they were separate entities when they shared the communications and had no common litigation interest.
A Special Referee and Supreme Court required a showing that communications related to pending or reasonably anticipated litigation for the common interest doctrine to apply; the Appellate Division reversed, adopting a broader federal approach removing the litigation requirement.
The Court of Appeals reversed the Appellate Division and reinstated the litigation requirement for New York’s common interest doctrine.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether the common interest doctrine protects shared attorney-client communications only when they relate to pending or reasonably anticipated litigation	Ambac: waiver occurred because communications were shared between separate entities absent common litigation interest	Bank of America: communications were privileged whenever they concerned a common legal interest (e.g., closing the merger), even if no litigation was pending	Held: New York requires that the common interest doctrine be limited to communications related to pending or reasonably anticipated litigation; otherwise privilege is waived
Whether merger-related, pre-closing joint legal work (SEC filings, regulatory approvals) is protected absent litigation	Ambac: these are transactional/business matters and cannot be shielded by the doctrine without litigation	Bank of America: transactional legal advice is within the scope of a common legal interest and should be protected	Held: transactional common legal interests alone do not satisfy the doctrine; protection requires relation to litigation

Spectrum Sys. Intl. Corp. v. Chemical Bank, 78 N.Y.2d 371 (N.Y. 1991) (describing privilege purpose and need for narrow construction)
People v. Osorio, 75 N.Y.2d 80 (N.Y. 1989) (recognizing common interest/joint defense exception in pending criminal matters)
Rossi v. Blue Cross & Blue Shield of Greater N.Y., 73 N.Y.2d 588 (N.Y. 1989) (allocation of burden to prove privilege elements)
In re Teleglobe Communications Corp., 493 F.3d 345 (3d Cir. 2007) (federal authority expanding common interest doctrine beyond litigation)
United States v. BDO Seidman, LLP, 492 F.3d 806 (7th Cir. 2007) (federal decision rejecting a litigation-only requirement for the doctrine)