Separately represented clients sometimes may avoid the normal waiver implications of sharing privileged communications by entering into a common interest agreement — but such contractual arrangements frequently do not work. Many of the failures result from the lack of the necessary identical legal interest among the participants.
In Howard v. IOMAXIS, LLC, No. 18 CVS 11679, 2023 NCBC Order 58 (N.C. Super. Ct. Nov. 3, 2023), plaintiffs sued an LLC and its members, alleging that a corporate transaction was invalid. One of the defendants (Hurysh) owned 5% of the defendant LLC. Hurysh eventually realized that plaintiffs had a good point, and began to cooperate with them under a common interest agreement. Defendants understandably argued that "a common interest cannot exist because the [Plaintiffs] and Hurysh are on opposite sides of the lawsuit." Id. ¶ 47. But the court rejected that argument — explaining that "[e]ven parties named as adversaries can share some interests in common." Id. ¶ 48.
Although about half of common interest agreement assertions fail, imaginative litigants may sometimes rely on the common interest contractual arrangement to avoid privilege waiver.
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