Communications Among Counsel For Joint Venturers Not Privileged Where Counsel Is Representing Interests Of Joint Venturers Rather Than The Venture Itself

In an April 19, 2024 order, Justice Andrew Borrok addressed whether communications relating to a joint venture were protected from disclosure under the attorney-client privilege and/or work product protection.

Mesquite Cr. Wind LLC v Mars Wind, Inc., Index No. 655535/2021, concerned contractual claims relating to the production, receipt, sale and hedging of wind energy in the Texas energy market, arising from a massive winter storm in February 2021. In opposing production of communications among or between Plaintiff Mesquite’s joint venture partners (Duke Energy Corporation and Sumitomo Corporation of the Americas), and/or their respective counsel, Plaintiff argued that i) because it has no employees, it was obliged to avail itself of the personnel of its joint venture partners, such that they and their employees were agents of Mesquite; (ii) Mesquite, Duke, and Sumitomo had a common legal interest for purposes of privilege/protection analysis.

Justice Borrok found that communications in which counsel was representing the interests of the individual joint venture partners, rather than the interests of the joint venture itself, to be subject to disclosure: “Each partner employs its own lawyers, and those lawyers are communicating with each other about a company that each of their separate employers has invested in. This simply does not present the creation of an attorney-client relationship between the partners such that their communications are protected.” Mesquite Cr. Wind LLC, p. 10.

However, Mesquite properly asserted the privilege “as to communications including Duke or Sumitomo personnel that were to or from attorneys with whom Mesquite had an attorney-client relationship”, “provided (i) that those attorneys were actually acting in furtherance of Mesquite's interests and (ii) the personnel included were reasonably necessary to the provision of legal services to Mesquite. Id., p. 12 (emphasis in original). The Court found it unnecessary to reach Plaintiffs’ assertion of common interest privilege, as any documents it might protect fell within the court’s ruling protecting communications involving Mesquite’s lawyers. Id., p. 15.

Work product protection applied to most of the documents submitted for in camera review because they reflected counsel’s “mental impressions, legal research, analysis, conclusions, legal theory, or strategy”, but a document by a non-lawyer identifying a potential business issue and stating that counsel had been made aware of the issue was not protected because it did not “include[] anything remotely suggestive of a lawyer's learning and professional skills”. Id., pp. 15-16.

The attorneys at Schlam Stone & Dolan frequently litigate cases involving assertions of privilege and work-product protection, in commercial disputes and otherwise. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.