473 B.R. 509
Bankr. S.D.N.Y.2012Background
- Vertrue and the Agent, lenders and their counsel exchanged communications claimed to be privileged or covered by common interest.
- Paymentech sought production of documents related to pre-April 2, 2012 discussions on finances, liquidity, restructuring, and threats to terminate the processing agreements.
- May 22, 2012 Order partially overruled objections and required privilege logs and possible limited depositions, preserving some privilege issues.
- After January 20, 2012 Paymentech letter, Vertrue and the Agent allegedly developed a litigation strategy to prevent termination of agreements.
- April 2, 2012 Protocol defined restructuring terms; post-Protocol communications were argued to be protected by common interest.
- Court ultimately sustained Vertrue’s objections based on common interest doctrine for the disputed documents.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the common interest is legal, not purely commercial | Vertrue/Agent shared a legal interest in preventing termination. | Interest was mainly commercial, not legal. | Common interest found in legal strategy after Jan 20, 2012 |
| Whether there was an objective confidentiality expectation | Parties expected confidentiality; meetings announced confidentiality. | Restructuring Confidentiality Agreement alone should govern. | Confidentiality expectation existed between Vertrue and the Agent |
| Whether communications were made in anticipation of litigation | Discussions aimed at preventing termination and future litigation were contemplated. | Not necessary to be litigation-ignited; general business talks could suffice. | Communications anticipated litigation; protected under common interest |
| Whether post-April 2, 2012 communications expanded common interests | Post-Protocol, common interest included restructuring efforts. | Common interest limited to termination-prevention. | After Protocol, broader common legal interests protected |
Key Cases Cited
- Nordbank AG N.Y. Branch v. Swerdlow, 259 F.R.D. 64 (S.D.N.Y. 2009) (two-part showing for common interest doctrine)
- Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437 (S.D.N.Y. 1995) (doctrine does not extend to purely business strategy)
- Bank of America, N.A. v. Terra Nova Insurance Co. Ltd., 211 F. Supp. 2d 493 (S.D.N.Y. 2002) (common interest not automatic for commercial goals)
- Allied Irish Banks, P.L.C. v. Bank of Am., N.A., 252 F.R.D. 163 (S.D.N.Y. 2008) (common interest doctrine for legal coordination)
- In re Megan-Racine Assocs., Inc., 189 B.R. 562 (Bankr. N.D.N.Y. 1995) (joint-defense privilege requires each communication to further common interest)