2013 NCBC 42
N.C. Bus. Ct.2013Background
- SCR-Tech previously had ownership ties to Ebinger (through predecessors) until SCR-Tech was sold to Catalytica on February 23, 2004; later Ebinger and SCR-Tech were adverse to Defendants in separate litigation.
- SCR-Tech withheld three categories of communications as privileged: (1) ~85 communications with Ebinger from 2001–Feb. 23, 2004; (2) ~5 communications with Catalytica after Feb. 23, 2004 (pre‑litigation); and (3) ~24 communications with Ebinger after Dec. 2010, claimed under the common‑interest doctrine. SCR-Tech also later logged an additional ~112 Ebinger communications.
- Defendants moved to compel production arguing privilege did not attach (or was waived) for these communications.
- The court evaluated (a) whether parent‑subsidiary or joint‑client privilege applied to the pre‑2004 and post‑acquisition communications and (b) whether the common‑interest doctrine covered post‑2010 communications where no corporate affiliation existed.
- The court distinguished joint‑client privilege (tied to identity/control) from the common‑interest doctrine (tied to an identical legal interest and communications made in furtherance of a joint legal effort).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Privilege for SCR‑Tech ↔ Ebinger communications (2001–Feb. 23, 2004) | Ebinger functioned as SCR‑Tech’s parent/common legal participant; communications reflect legal advice re: sale, so privileged | Ebinger was only a minority owner (≤37.5%); not a parent/controlling owner, so joint‑client privilege should not apply | Court: Privilege applies — corporate affiliation plus shared legal interest sufficed; motion denied as to this category |
| Privilege for SCR‑Tech ↔ Catalytica communications (after Feb. 23, 2004) | Catalytica acquired SCR‑Tech outright; shared ownership and legal interest protect communications about IP and related legal matters | Defendants challenged extent of privilege but not subject matter | Court: Privilege applies (full ownership + shared legal interest); motion denied as to this category |
| Privilege for SCR‑Tech ↔ Ebinger communications (after Dec. 2010) | SCR and Ebinger shared a common legal interest (both adverse to Defendants on related technology) and had a Cooperation Agreement — so common‑interest privilege applies | Defendants contend common‑interest not met: no identical legal interest, or no meeting of minds/joint agreement; some communications are merely business support to SCR | Court: Mixed result — communications that were in furtherance of coordinated legal strategy in the separate suits are privileged; communications that merely assisted SCR under the Cooperation Agreement (business support) are not privileged; motion granted in part and denied in part |
| Subject‑matter waiver from earlier production | SCR-Tech: produced documents pre‑privilege period; no waiver of privilege for later claimed communications | Defendants: prior production by former counsel constitutes subject‑matter waiver of asserted privilege | Court: No waiver shown — produced documents predate the claimed privilege period for the contested coordination communications |
Key Cases Cited
- In re Teleglobe Commc’ns Corp., 493 F.3d 345 (3d Cir.) (distinguishes co‑client/joint client privilege from common‑interest doctrine and analyzes parent‑subsidiary contexts)
- Hunton & Williams v. United States Dep’t of Justice, 590 F.3d 272 (4th Cir.) (common‑interest doctrine requires a meeting of the minds though formal writing is not required)
- In re Grand Jury Subpoena, 415 F.3d 333 (4th Cir.) (discusses joint‑defense/common‑interest principles)
- United States v. Aramony, 88 F.3d 1369 (4th Cir.) (rejects application of common‑interest doctrine where interest was primarily business or reputational, not legal)
- American Tel. & Tel. Co., 86 F.R.D. 603 (D.D.C.) (parent/subsidiary affiliation plus substantial identity of legal interest can support joint‑client privilege)
- Polycast Tech. Corp. v. Uniroyal, Inc., 125 F.R.D. 47 (S.D.N.Y.) (when corporations share a mutual legal interest in a matter discussed with counsel, a joint privilege can attach)