Automated Summary
Key Facts
The case involves SVB Financial Trust (SVBFT), successor to SVB Financial Group (SVBFG), and the Federal Deposit Insurance Corporation as Receiver for Silicon Valley Bank (FDIC-R). The Bank was the principal subsidiary of SVBFG as of end of 2022, accounting for nearly 99% of SVBFG's assets. Both entities had completely overlapping Boards of Directors and were jointly represented by the same outside counsel (Sullivan & Cromwell LLP) and in-house counsel. FDIC-R moved to overrule SVBFT's objections to access 47 documents that SVBFT claimed were protected by exclusive attorney-client privilege. The Court found SVBFT failed to establish an exclusive attorney-client relationship because the Bank and SVBFG were jointly represented on matters of common interest. The Court granted FDIC-R's motion to overrule the privilege objections, ruling that the joint-client exception to attorney-client privilege applies when clients are jointly represented.
Issues
- Whether the joint-client exception to attorney-client privilege under California Evidence Code § 962 applies when two entities (Silicon Valley Bank and SVBFG) were jointly represented by the same counsel. The court holds that so long as the lawyer was retained or consulted on a matter of common interest by the jointly-represented clients, all communications made in the course of that relationship are discoverable and not privileged as between them, regardless of whether communications concern matters of common legal interest.
- The court must determine if SVBFT Financial Trust has an exclusive attorney-client privilege claim against FDIC-R regarding 47 disputed documents, given that Silicon Valley Bank and SVBFG were jointly represented by the same outside and in-house counsel during the relevant time period. SVBFT contends that communications concerning certain matters were exclusive to SVBFG and not the Bank, but the court finds no evidence establishing an exclusive attorney-client relationship.
Holdings
The Court grants FDIC-R's motion to overrule SVBFT's exclusive privilege objections to 47 documents. The Court found that SVBFT failed to establish an exclusive attorney-client relationship with Sullivan & Cromwell or in-house counsel during the time when the Bank and SVBFG were jointly represented. Because the Bank and SVBFG were jointly represented by the same counsel, there was no privilege as between them. The Court examined the disputed documents in camera and found no express indicia of a separate, exclusive attorney-client relationship. The Court determined that communications discussing regulatory standards do not necessarily address matters unique to SVBFG, particularly where both institutions faced similar regulatory requirements and joint examination.
Remedies
The Court granted FDIC-R's motion to overrule SVBFT's objections to access 47 documents, finding no exclusive attorney-client privilege existed between the parties. The Court also granted administrative sealing motions filed by both parties. SVBFT failed to establish an exclusive attorney-client relationship with counsel as to any matter during the time the Bank and SVBFG were jointly represented, and thus is not entitled to assert exclusive privilege against FDIC-R.
Legal Principles
California Evidence Code § 962 establishes the joint-client exception to attorney-client privilege: when two or more clients are jointly represented by the same lawyer on a matter of common interest, none of them may claim privilege as to communications made in the course of that relationship in civil proceedings between them. The joint-client exception is not limited to communications concerning a matter of common legal interest—it applies to all communications made during the joint representation. The party asserting an exclusive attorney-client privilege bears the burden of establishing its existence and scope, including through engagement agreements, declarations, or testimony. SVBFT failed to provide evidence of an exclusive attorney-client relationship with outside counsel or in-house counsel during the period the Bank and SVBFG were jointly represented, and the disputed documents themselves did not permit the Court to infer such an exclusive relationship.
Precedent Name
- Zador Corp. v. Kwan
- Kamakana v. City & County of Honolulu
- Costco Wholesale Corp. v. Superior Court
- Vieste, LLC v. Hill Redwood Dev.
- Anten v. Superior Court
- Glacier Gen. Assurance Co. v. Superior Court
- Center for Auto Safety v. Chrysler Group, LLC
Cited Statute
- California Evidence Code
- Federal Rules of Evidence
Judge Name
Virginia K. DeMarchi
Passage Text
- Because SVBFT has not met its burden to show that SVBFG had an exclusive attorney-client relationship with Sullivan & Cromwell and/or in-house counsel, SVBFT is not entitled to assert an exclusive privilege as to the 47 disputed documents against FDIC-R.
- Evidence Code § 962 provides, "[w]here two or more clients have retained or consulted a lawyer upon a matter of common interest, none of them, nor the successor in interest of any of them, may claim a privilege under this article as to a communication made in the course of that relationship when such communication is offered in a civil proceeding between one of such clients (or his successor in interest) and another of such clients (or his successor in interest)." See Vieste, LLC v. Hill Redwood Dev., No. C-09-04024 JSW (DMR), 2010 WL 4807058, at *4-5 (N.D. Cal. Nov. 18, 2010); Anten v. Superior Court, 233 Cal. App. 4th 1254, 1256 (2015).
- SVBFT has not established the existence of an exclusive privilege. Its principal argument is that the joint-client exception to the general rule protecting privileged communications from disclosure applies only when the particular communications at issue concern a matter of common legal interest shared by the jointly-represented parties. Dkt. No. 221 at 2. This is a misreading of the Evidence Code § 962. So long as the lawyer was retained or consulted on a matter of common interest by the jointly-represented clients, all communications "made in the course of that relationship" are discoverable by the parties and not privileged as between them. The provision does not limit the scope of the exception to only communications that are specific to a matter of common legal interest.