In motion sequence 011 case, Plaintiffs Ambac Assurance Corporation and The Segregated Account of Ambac Assurance Corporation (together "Ambac") seek discovery from Defendant Bank of America Corp. ("Bank of America") that relates to the [*2]merger between Countywide and Bank of America. In a decision dated June 24, 2013, Special Referee John A.K. Bradley held that the documents relating to the merger are not automatically protected by the attorney-client privilege. Bank of America now seeks vacatur of the Special Referee's decision.

Defendant Bank of America argues for an extension of New York's common-interest doctrine. The common-interest doctrine is an exception to the axiom that the presence of a third-party waives the attorney-client privilege. A third party may be privy to the communication between an attorney and a client, without destroying the privilege, if the communication is made for the purpose of furthering a nearly identical legal interest shared by the client and the third party. See Hyatt v. State Franchise Tax Bd., 105 AD3d 186, 205 (2d Dep't 2013).

As Justice Bradley correctly observed, New York also requires that there be a reasonable anticipation of litigation in order for the common-interest doctrine to apply. See Hyatt, 105 AD3d at 205 ("This Court has held that application of the common-interest privilege further requires that the communication be made in reasonable anticipation of litigation'"); Aetna Cas. and Sur. Co. v. Certain Underwriters at Lloyd's London, 176 Misc 2d 605 (Sup. Ct. NY Cnty. Feb. 17, 1998), aff'd, 263 AD3d 367, 368 (1st Dept' 1999) ("Thus any common interest' privilege must be limited to communication between counsel and parties with respect to legal advice in pending or reasonably anticipated litigation in which the joint consulting parties have a common legal interest.").

Bank of America argues that a case often relied on by New York courts, U.S v. Schwimmer, 892 F.2d 237 (2d Cir. 1989), rejected the "litigation requirement" when analyzing the common-interest doctrine. However, the Schwimmer court rejected only the requirement that "there be actual litigation in progress for the common interest rule of the attorney-client privilege to apply," in favor of the requirement for that there be a reasonable anticipation of litigation. Schwimmer, 892 F.2d at 244.Bank of America contends that a communication made in furtherance of a "legal enterprise" falls within the common-interest doctrine. According to Bank of America, a "legal enterprise" is a type of common-interest, and a signed merger agreement can be considered a legal enterprise. In support if its argument, Bank of America cites American Re-Insurance. Co. v. United States Fidelity & Guaranty Co., 40 AD3d 486, 491 (1st Dep't 2007), and North River Insurance Co. v. Columbia Casualty Co., No. 90 Civ. 2518 (MJL), 1995 WL 5792 (S.D.NY Jan. 5, 1995). Again, however, these cases hold only that there need not be pending litigation, merely that litigation be anticipated.Defendant fails to cite any New York case that applied the common-interest doctrine in the context of a signed, but not completed, merger agreement. More significantly, Defendant also fails to cite any New York case that applied the common-interest doctrine outside of either joint-representation of two parties by one attorney, or where parties reasonably anticipated litigation. [*3]

Defendant's reliance on 330 Acquisition Co., LLC v. Regency Savings Bank, F.S.B., 12 AD3d 214 (1st Dep't 2004), is also unavailing. The First Department found that pre-bankruptcy communications between a debtor and creditor fell within the common-interest doctrine, based on a "realistic appreciation of the [creditors]'s interlocking relationship with [the debtor]." 330 Acquisition, 12 AD3d at 214. However, there had been ample litigation prior to the bankruptcy, to which the communications related. See 330 Acquisition Co., LLC v. Regency Savings Bank F.S.B., No. 109283/98, 2003 WL 25516150 (Sup. Ct. NY Cnty. July 11, 2003), aff'd, 12 AD3d 214 (1st Dep't 2004).

Bank of America correctly argues that there is no litigation requirement when two parties consult with one attorney. See Wallace v. Wallace, 216 NY 28 (1915); Old Homestead Enters. of Saratoga v. Hall, Jr. Enters., 102 AD3d 935 (3d Dep't 1984). However, that is not the case here, and dual-representation is an entirely separate subset of the common-interest doctrine. See Am. Re-Ins. Co. v. U.S. Fidelity & Guar. Co., 40 AD3d 486, 491 (1st Dep't 2007) ("The clearest indication of common interest is dual representation . . . . Common interest also extends to a situation where there is a joint defense or strategy, but separate representation.") (internal citations omitted).

Although some federal courts have found that communications made after a merger agreement was signed do fall within the common-interest doctrine, there is no New York case that has expanded the doctrine in such a manner. See JP Morgan Chase & Co. Sec. Litig., No. 06 C 4674, 2007 WL 2363311 (N.D. Ill. Aug. 13, 2007).

Bank of America argues that because one federal case that analyzed New York law "assume[d] arguendo" that New York law would not require actual or anticipated litigation, and then denied the privilege claim anyway, that the judge believed that New York law actually did not require litigation. Allied Irish Banks, P.L.C. v. Bank of America N.A., No. 03 Civ 3748(DAB)(GWG), 2008 WL 2389958 at *2 (S.D.NY June 11, 2008). This is a fallacious argument, based on both the definition of arguendo and that the same court had previously held that "New York state law applies the common interest doctrine only with respect to legal advice in pending or reasonably anticipated litigation." Allied Irish Banks, P.L.C. v. Bank of America N.A., 252 F.R.D. 163, 172 (S.D.NY March 26, 2008); Black's Law Dictionary (9th ed. 2009) (defining arguendo as "for the sake of argument.")

Therefore, Special Referee Bradley correctly held that New York law does not allow a privilege claim under the common-interest doctrine unless there is pending or reasonably anticipated litigation.

(Order of the Court appears on the following page).

Accordingly, it is hereby

ORDERED that Defendant Bank of America's motion to vacate the special referee's decision is DENIED.

This constitutes the decisions and order of the court.

ENTER:

/s/

Dated: New York, NY, J.S.C.October ___, 2013Hon. Eileen Bransten