A recent federal district court decision highlights some meaningful limitations on the attorney-client privilege―limitations about which in-house and outside corporate counsel should be aware. See Sandoz v. Lannett, C.A. No. 20-3538, __ F. Supp. 3d __, (E.D. Pa. Nov. 4, 2021). In particular, the Sandoz court held that, even wholly within a corporate client, nonlawyer personnel cannot disseminate corporate counsel’s legal advice without losing the privilege; and the court held that the common interest privilege attaches only to communications that include lawyers representing all of the clients participating in the common effort, and does not apply to communications between or among the clients themselves.

Sandoz served as a distributor for Cediprof, a drug manufacturer. Cediprof terminated its contract with Sandoz, and Lannett succeeded Sandoz as Cediprof’s distributor. Sandoz brought a claim in arbitration against Cediprof, and filed a federal suit in the Eastern District of Pennsylvania against Lannett, claiming that Lannett had interfered wrongfully with the contract between Sandoz and Cediprof.

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