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Current Developments in the Commercial Divisions of the
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Posted: October 5, 2016

Non-Party Did Not Waive Common Interest Privilege

On September 29, 2016, the First Department issued a decision in 21st Century Diamond, LLC v. Allfield Trading, LLC, 2016 NY Slip Op. 06245, holding that a non-party did not waive the common interest privilege, explaining:

The motion court based its finding that the common-interest privilege had been waived on a poorly worded analogy — the import of which is not entirely clear — made in open court by nonparty appellant Sterling’s former counsel, in addition to several other potentially misleading representations (most of which are not contained in the record before us). Although we agree with the motion court that Sterling’s previous counsel’s representations were potentially misleading, it appears that plaintiffs’ counsel agreed to limit the subpoena to internal Sterling communications, all of which were produced and none of which were privileged. Further, although Sterling had signed a common-interest agreement with defendant Exelco, Sterling was not a named defendant, and in that sense remained a neutral party. Even taken together, these representations do not clearly, unmistakably and without ambiguity express an intention to waive the privilege. Moreover, Sterling could not unilaterally waive the joint privilege on behalf of third—party defendants-appellants, the other parties asserting it.

(Internal quotations and citations omitted) (emphasis added).

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