MEMORANDUM OPINION AND ORDER SUSTAINING PLAINTIFFS’ OBJECTION TO DEFENDANT’S REQUEST FOR PRODUCTION OF DOCUMENTS
Velo Holdings Inc. and its affiliated debtors (“Vertrue” or “Velo”) and Pay-
BACKGROUND
Vertrue commenced this adversary proceeding against Paymentech seeking to enjoin termination of credit card processing agreements between Vertrue and Pay-mentech. On April 25, 2012, the Court granted Vertrue a temporary restraining order preventing Paymentech from terminating the processing agreements, and setting the matter down for a preliminary injunction hearing. (ECF Doc. # 12.) During discovery in advance of the preliminary injunction hearing, Vertrue and the Agent have raised issues relating to attorney-client privilege, work product protection, and a possible common legal interest between the Agent and Vertrue that would protect otherwise privileged documents from waiver because they were shared between Vertrue and the Agent. In response to a discovery request from Paymentech, Vertrue objected to certain discovery, asserting attorney-client privilege, work product protection, and the common interest doctrine.
In the May 22 Order, the Court overruled Vertrue’s objections to Paymentech’s discovery requests seeking discovery of all documents and communications between Vertrue and its attorneys, on the one hand, and the Agent and First Lien Lenders and their attorneys, on the other hand, that took place before April 2, 2012, relating to (i) financial results, liquidity issues, restructuring proposals, a pre-negotiated bankruptcy case, (ii) Vertrue’s November 14, 2011 meeting with Paymentech and Visa and (iii) any threats to terminate the processing agreements.
According to the declaration of Lorraine DiSanto, dated May 17, 2012 (the “DiSanto Decl.,” ECF Doc. #24), “[ajfter Chase Paymenteeh’s January 20, 2012 letter to Vertrue advising that Chase Paymentech planned to try to terminate the processing agreements on April 20, 2012, Vertrue and the Agent, with their respective attorneys and financial advisors, worked together to develop a litigation strategy to prevent Chase Paymentech from impermissibly terminating the processing agreements.” DiSanto Decl. ¶ 7. With respect to documents or discussions between counsel for Vertrue and the Agent after January 20, 2012 about developing a legal strategy to prevent termination of the processing agreements, the May 22 Order concluded that such communications may be protected from discovery by attorney work product and common interest protection, but it was not possible for the Court to resolve the issues on the record before the Court. Therefore, the Court required Vertrue to provide a privilege log identifying each document Vertrue claims is privileged.
The parties submitted the additional letter briefs and evidence. While the May 22 Order provided that the parties could submit any disputed documents for in camera review, counsel advised the Court in a telephone hearing on June 5, 2012 that in camera review of documents is unnecessary.
DISCUSSION
Paymentech argues that the common interest doctrine does not apply for three reasons. First, Paymentech claims that the interest shared between Vertrue and the Agent was purely commercial and that such a shared interest cannot create a common legal interest. Second, Paymen-tech argues that neither Vertrue nor the Agent had an expectation of confidentiality at the time of the communications at the center of this dispute. Third, Paymentech argues that the common interest doctrine is inapplicable because none of the communications were made in anticipation of litigation. Based on the facts established in the declarations and deposition excerpts submitted to the Court, each of Paymen-tech’s arguments fails.
The common interest doctrine is “an exception to the general rule that voluntary disclosure of confidential, privileged material to a third-party waives any applicable privilege.” HSH Nordbank AG N.Y. Branch v. Swerdlow,
The rationale for the doctrine is that it “permits persons who have common interests to coordinate their positions without destroying the privileged status of their communications with their lawyers.” Restatement (Third) of the Law Governing Lawyers § 76 cmt. b. “The communication must relate to the common interest, which may be either legal, factual, or strategic in character. The interests of the separately represented clients need not be entirely congruent.” Id. cmt. e. Clients with common interests may also have conflicting interests without losing the benefit of the common interest doctrine where the communications they seek to protect relate to their common interests. See Eisenberg v. Gagnon,
The common interest doctrine applies to both attorney-client communications and work product materials. Am. Eagle Outfitters, Inc. v. Payless Shoe-Source, Inc., No. CV 07-1675(ERK)(WP),
In this case Paymenteeh acknowledged in the June 5, 2012 telephone hearing that the documents at issue were, in the first instance, protected from discovery by attorney-client privilege or attorney work product. It is the subsequent sharing with the Agent of documents and communications of otherwise protected information that is the focus of the parties’ dispute.
A. The Common Interest Between Vertrue and the Agent is Not Purely Commercial
Paymenteeh insists that Vertrue and the Agent must share identical legal interests, but that is not the case. Parties asserting a common interest need only share a common interest about a legal matter. Schwimmer,
A “key consideration” is that the nature of the interest “be legal, not solely commercial,” as Paymenteeh argues is the case here. Nordbank,
Similarly, in Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A.,
The facts presented by the relationship between Vertrue and the Agent are distinguishable from those of Bank of America and Bank Brussels. First, the interest claimed as common does not encompass the entire commercial relationship or “joint business strategy” between Vertrue and the Agent; rather, Vertrue,
B. There Was an Expectation of Confidentiality Between Vertrue and the Agent
Paymentech also argues that “[n]either Vertrue nor the Agent had an objectively reasonable expectation of confidentiality with respect to any exchange of information concerning any litigation strategy relating to Paymentech.” (ECF Doc. # 34 at 2.) Paymentech insists that the parties relied only upon the Restructuring Confidentiality Agreement, entered on November 28, 2011, which could not create a reasonable expectation of confidentiality because the Restructuring Confidentiality Agreement did not specifically provide for confidentiality of information shared relating. to developing a legal strategy to prevent termination of the Processing Agreements.
Paymentech relies too heavily on the Restructuring Confidentiality Agreement as the only possible source of a common legal interest between the Agent and Vertrue. Courts in this circuit have routinely held that a writing is unnecessary to establish a common legal interest. See, e.g. Nordbank,
C. The Communications Were Made in Anticipation of Litigation
“[I]t is not necessary for litigation to be in progress for the common interest doctrine to apply.” Bank Brussels,
While the parties have not made any express statements regarding choice of law, the distinction is irrelevant here because the communications between the parties were made in anticipation of litigation. The fact that the Agent is not currently a party to the litigation before this Court does not preclude the common interest doctrine from application.
D. The Parties Had a Common Legal Interest After April 2, 2012
On April 2, 2012, the First Lien Lenders and Vertrue entered into a Protocol outlining the terms of a proposed restructuring. In the May 22 Order, the Court held that prior to April 2, 2012, it was not objectively reasonable for Vertrue to believe that its communications with the Agent were confidential, except as related to legal strategy to prevent termination of the processing agreements. (May 22 Order at 5.) But after the parties entered into the Protocol — providing that the First Lien Lenders would credit bid for some of Vertrue’s assets, and that the Court would oversee an auction process for the remainder of Vertrue’s business in which the First Lien Lenders would also serve as stalking-horse bidder — Vertrue and the Agent held a common legal interest with regard to restructuring proposals. Further, after April 2, 2012 it was objectively reasonable for both Vertrue and the Agent to believe that the communications between the parties would be confidential. See Quigley,
CONCLUSION
As was the case in Quigley, “the commonality or lack of commonality” of the interest between Vertrue and the Agent “depends on which interest you consider.” Quigley,
After the Protocol was entered on April 2, 2012, the parties’ common legal interests expanded beyond simply preventing termination of the processing agreements. From that time forward, the parties had a common legal interest in effectuating a successful restructuring of Vertrue’s business. To the extent documents or communications were otherwise privileged, the common interest doctrine prevented privilege from being lost because documents or communications were shared between Ver-true and the Agent, and their respective counsel.
Accordingly, the Court SUSTAINS the balance of Vertrue’s objections to the disputed discovery based on common interest privilege.
IT IS SO ORDERED.
Notes
. The May 22 Order provided, in relevant part:
According to the Debtors, "[o]n November 17, 2011, Vertrue held a confidential meeting with the secured lenders ... to discuss financial results and liquidity issues and to present the financial restructuring proposal that included a pre-negotiated bankruptcy case.” Velo further explains that, at the November 17 meeting, it reported to the lenders the results of its November 14, 2011 meeting with Visa and Paymentech. Velo’s description of the November 17 meeting makes clear that these discussions between a borrower and its lenders were business discussions not protected by attorney-client privilege or work product protection. Velo and the lenders continued to negotiate the terms of a proposed restructuring and on April 2, 2012, the First Lien Lenders and the Debtors entered into a Protocol outlining the terms of a proposed restructuring. Before entering into the Protocol, the interests of Velo and the First Lien Lenders were not aligned insofar as an agreement on restructuring was concerned. Velo cannot shield from discovery documents and communications that might otherwise have been subject to a claim of privilege that were shared between Velo and the FirstLien Lenders, or their respective counsel, before the Protocol was reached. Velo has failed to carry its burden of establishing the existence of a common interest privilege with respect to documents and communications regarding any restructuring proposals until April 2, 2012, when the Protocol was entered. Until that date, it was not "objectively reasonable for [Velo] to believe that the communication was confidential." In re Quigley Co., Inc., No. 04-15739(SMB), 2009 Bankr.LEXIS 1352, at *9 (Bankr. S.D.N.Y. April 24, 2009). Factual presentations or discussions before April 2, 2012 about Paymentech’s threats to terminate the processing agreements with Vertrue stand on no stronger footing.
May 22 Order at 4-5.
. Vertrue had not submitted a privilege log when the common interest doctrine issue was initially presented to the Court. Fed.R.Civ.P. 45(d)(2)(A) requires a person withholding documents under a claim of privilege to “describe the nature of the withheld documents, communications, or tangible things in a manner that, without revealing information itself privileged or protected, will enable the parties to assess the claim.” Without knowing the dates of the communications, authors, addressees, who received copies, and the subject matter, and an in camera review of documents, if necessary, it is impossible to know whether the documents or communications were subject to attorney-client privilege or work product protection in the first instance, and, if so, whether the result is altered by any subsequent communications between Vertrue and its counsel, and the lenders or their counsel. After Vertrue provided a privilege log, Paymentech elected not to challenge the existence of privilege in the first instance.
. The parties agree that the current dispute relates to 291 documents listed in Vertrue’s privilege log asserting common interest privilege, and to possible deposition examination relating to the subject of these communications.
. In Sokol v. Wyeth, Inc., No. 07-Civ.-8442 (SHS)(KNF),
. Whether the January 20, 2012 letter terminated the Processing Agreements or evidenced Paymentech’s intent to terminate the Processing Agreements is still an issue in dispute in this case. The Court’s statements regarding this letter are not to be construed as conclusions regarding the alleged legal effect of the January 20, 2012 letter from Pay-mentech to Vertrue.
. The May 22 Order concluded that the Restructuring Confidentiality Agreement did not shield information shared between Vertrue and the Agent on the basis of common interest doctrine:
One thing that should be clear is the fact that Velo and the First Lien Lenders entered into the Restructuring Confidentiality Agreement on November 28, 2011 does not mean that all information shared between them is protected from discovery by attorney-client privilege or work product protection. The effect of the Restructuring Confidentiality Agreement is that the First Lien Lenders could not further disclose confidential information provided by Velo. But that agreement cannot create privilege where none exists, or limit discovery by Paymentech in the context of this adversary proceeding, unless specific documents or communications are protected by attorney-client privilege or work product.
May 22 Order at 4.
. Initially, Paymentech disputed the Agent's right to be heard in this litigation absent formal intervention. The issue was resolved with an agreement permitting the Agent’s participation to a limited extent without formal intervention. The Agent’s counsel has appeared and been heard at each hearing in the case.
. The documents and communications must, of course, relate to the rendering or receipt of legal advice to the client (or those sharing the common legal interest), intended to be confidential and, in fact, otherwise remaining confidential. Communications of information— even confidential information — exclusively for a business purpose are not protected.