NIETZER & HÄUSLER begleitet deutsche Unternehmen in US.Verfahren Seite an Seite mit vor Ort tätigen US.Prozessanwälten, sei es um ein „kontrollierendes“ Auge betreff Strategie und (insbes. Kosten) Effizienz zu werfen, sei es um US.Verfahrenseigenheiten den deutschen Mandanten verständlich zu machen, sei es um den US.Kollegen zuzuarbeiten oder sei es um notwendige Massnahmen oder Verfahrenshandlungen im Hinblick auf Abwehrmassnahmen in Deutschland jetzt oder später sichergestellt zu wissen. Ein Thema, das es hierbei hin und wieder anzugehen gilt, sind Joint Defense Agreements in den Fällen, in welchen mehrere Firmen verklagt werden und es sinnvoll erscheinen kann, die Kräfte zu bündeln. Nachfolgend Wiedergabe eines nützlichen US.Artikels, erschienen in der Fachzeitschrift der American Bar Association, deren Mitglied NIETZR&HÄUSLER ist.
Published in the American Bar Association Section of Litigation Committee on Criminal Litigation Newsletter, Winter 2005, Volume 4, #2.
By Jonathan W. Hugg
A joint defense agreement is a widely used tool—some would even say an essential tool—that allows parties and their counsel to share confidential information with other parties and their counsel without fear that the disclosure will result in waiver of the attorney-client privilege, as would typically occur when a third-party is present during an attorney-client discussion. United States v. Stepney, 246 F.Supp. 2d 1069, 1074-75 (N.D. Ca. 2003). See generally Amy Foote, Joint Defense Agreements in Criminal Prosecutions: Tactical and Ethical Implications, 12 Geo. J. Legal Ethics, 377 (1999).
WHAT IS A JOINT DEFENSE AGREEMENT?
Basically, a joint defense agreement is a contract among defendants that extends the attorney-client privilege across the defense camp, so as to form an umbrella “joint defense privilege.” Some other names for the joint defense privilege are the “common interest doctrine,” “common interest arrangement doctrine,” or “pooled information doctrine.” Lugosch v. Congel, 219 F.R.D. 220, 236 (N.D. N.Y. 2003). Joint defense agreements are available in both criminal and civil litigation. They may be oral, although courts prefer them to be in writing. In re Grand Jury Subpoena (Newparent), 274 F.3d 563, 569 (1st Cir. 2001); United States v. Stepney, 246 F.Supp. 2d at 1079 n. 5.
Having a joint defense privilege “serves to protect the confidentiality of communications passing from one party to the attorney for another party where a joint defense effort or strategy has been decided upon and undertaken by the parties and their respective counsel.” United States v. Schwimmer, 892 F.2d 237, 243-44 (2d Cir. 1989). United States v. Bay State Ambulance, 874 F.2d 20, 28 (1st Cir. 1989). In re Bevill, Bresler & Schulman Asset Management Corp., 805 F.2d 120, 126 (3d Cir. 1986). The key is that all parties and their counsel may exchange information and communicate confidentially with each other as if there were joint representation. The resulting joint defense privilege “applies regardless of the manner in which it is sought to put the communications in evidence, whether by direct examination, cross-examination, or indirectly as by bringing out facts brought to knowledge solely by reason of a confidential communication.” United States v. Schwimmer, 892 F.2d at 244 (emphasis original). |ADVANTAGES AND DISADVANTAGES OF A JOINT DEFENSE AGREEMENT
The advantages of a joint defense agreement are many. With a joint defense agreement, parties may present a united front, pool discovery, work product and resources and cut costs, freely consult together and coordinate theories, tactics, and arguments, and hire experts and investigators for the use and benefit of all. The alternative is isolation, an inability to obtain discovery from co-defendants, the possibility of co-defendants presenting inconsistent defenses that “point the finger” at each other, and the likelihood that the government will have an unfair advantage in plea or settlement negotiations and at trial, as it plays one defendant off against another and “picks-off” each.
REQUESTS TO ESTABLISH A JOINT DEFENSE AGREEEMENT
Generally, to establish a joint defense privilege, the party asserting the privilege has the burden of showing: (1) the communications at issue occurred in the course of a joint defense effort; (2) the statements were in furtherance of the effort; and (3) the privilege has not been waived. In re Bevill, Bresler & Schulman Asset Management Corp., 805 F.2d at 126.
A precondition to a joint defense agreement is that the parties must face actual or potential criminal or civil litigation against which to defend. Absent pending legal action, they cannot rely upon an ongoing past practice of sharing information, however longstanding, to maintain the confidentiality of their communications. There is no such thing as a “standing” or “rolling” joint defense agreement. In re Grand Jury Subpoena (Newparent), 274 F.3d at 575. Furthermore, the parties must objectively agree that they will join forces. The mere impression of one party that other parties are, should, or will cooperate does not suffice to prevent the disclosure of their discussions, including any admissions. United States v. Weissman, 195 F.3d 96, 100 (2d Cir. 1999); In re Bevill, Bresler & Schulman Asset Management Corp., 805 F.2d at 126; United States v. Sawyer, 878 F.Supp. 295, 297 (D. Mass. 1995). |DEFECTION OF A PARTY FROM A JOINT DEFENSE AGREEMENT
Complications may arise when one party defects from the joint defense agreement and chooses to cooperate with the government. The issue is whether the remaining defendants may impeach the turn-coat, who is frequently the government’s “star witness,” with information obtained in joint defense discussions.
The Ninth Circuit seemed to answer “no” in United States v. Henke, 222 F.3d 633 (9th Cir. 2000). There, the government charged Gupta, Desaigoudar, and Henke, all executives at Cal Micro, with conspiracy, false statements, and securities crimes. They all participated in joint defense meetings and discussed confidential information. Before trial, however, Gupta accepted a plea bargain and agreed to testify against the others.
Desaigoudar’s counsel moved to withdraw on the ground that under the joint defense privilege he owed a duty of confidentiality to Gupta that prevented counsel from cross-examining Gupta on matters discussed at the joint defense meetings. Henke’s counsel also asserted that he owed a duty to Gupta that impaired counsel’s ability to cross-examine. Gupta threatened legal action against both counsel if either revealed the joint defense discussions.
The District Court denied the motion to withdraw on the ground that new defense counsel would not have knowledge of the joint defense communications and that Desaigoudar and Henke would therefore suffer no prejudice from continued representation by their counsel. At trial the defense did not cross-examine Gupta, and the jury convicted. The Ninth Circuit, however, reversed.
Notably, the Ninth Circuit accepted that under the joint defense agreement counsel for Desaigoudar and Henke had an implied attorney-client relationship with Gupta. Therefore, according to the Circuit Court, counsel for Desaigoudar and Henke could not ethically defend them by impeaching Gupta with information obtained from Gupta during their joint defense meetings. This created a disqualifying conflict of interest that should have caused the District Court to grant the motion to withdraw.
In contrast, in United States v. Almeida, 341 F.3d 1318 (11th Cir. 2003), the Eleventh Circuit approved cross-examination of a defecting co-defendant with joint defense information. In that case, the government charged Fainberg and Almeida with conspiracy to traffic narcotics. With separate counsel Fainberg and Almeida entered into an oral joint defense agreement and at more than 100 meetings they and their lawyers shared “countless volumes of attorney-client and work product information.” Shortly before trial, however, Fainberg agreed to plead guilty and testify against Almeida.
The government argued at trial that because of the joint defense agreement Almeida’s counsel had a “classic divided loyalty problem.” According to the government, because of the joint defense agreement, Almeida’s counsel had an attorney-client privilege with Fainberg, which counsel would violate if, while defending Almeida, counsel cross-examined Fainberg with confidential information obtained from Fainberg during the joint defense. The District Court agreed, and in an effort to preserve the alleged privilege barred not only the use of exculpatory evidence obtained directly from Fainberg, but also derivative use of any information from Fainberg.
The Eleventh Circuit, however, reversed, holding that Fainberg waived his attorney-client privilege when he decided to cooperate with the government. The Circuit Court stated that, “when each party to a joint defense agreement is represented by his own attorney, and when communications by one co-defendant are made to the attorneys of other co-defendants, such communications do not get the benefit of the attorney-client privilege in the event that the co-defendant decides to testify on behalf of the government in exchange for a reduced sentence.” United States v. Almeida, 341 F.3d at 1326. This waiver removed any alleged conflict of interest preventing the cross-examination of Fainberg.
The divergent results in Henke and Almeida underscore the uncertainty that may result when a joint defense agreement breaks down. The party that turns state’s evidence may, or may not, run the risk of impeachment with confidences the party revealed during joint defense sessions, which could significantly undermine the credibility of the defector and lessen the value of his testimony to the government. The Eleventh Circuit believed that a written joint defense agreement could clarify this situation. United States v. Almeida, 341 F.3d at 1326 n.21. Therein, a party would agree to waive any privilege if he chose to cooperate with the government. There is a possibility, however, that the government would attack the waiver on the ground that it was not knowing and intelligent and that no rational defendant would lessen his potential value to the government and the hope of a lesser sentence by entering into such a waiver. | Jonathan W. Hugg is an associate with Obermayer Rebmann Maxwell & Hippel LLP. He is a member of the firm’s Litigation Department.