The Delaware Superior Court recently elaborated on the common interest doctrine in the context of a merger. In American Bottling v. Repole, C.A. No. N19C-03-048 AML CCLD, Judge Abigail LeGrow held that privileged communications shared with a third party during the final stages of a merger were not subject to the common interest doctrine. Under the common interest doctrine, the attorney-client privilege will not be waived, despite disclosure to a third party, when the communication at issue was between a client or his lawyer and another lawyer who is representing another person in a matter of common interest. This doctrine will only apply, however, when the parties’ shared interest involves primarily legal issues, not a commercial common interest. This commercial versus legal distinction was at the heart of the court’s conclusion in American Bottling.

Background

The subject litigation arose from defendant BA Sports Nutrition LLC’s (Body Armor) termination of its distribution agreement with plaintiff the American Bottling Co. (ABC) after ABC’s parent company, Dr. Pepper Snapple Group (DPSG), merged with one of Body Armor’s competitors, Keurig Green Mountain. As part of its due diligence process, Keurig and its advisers shared some otherwise privileged communications with DPSG regarding the distribution agreement’s termination clause and any associated fee, and sought DPSG’s input. The disclosure at issue took place after the merger agreement had been signed, but before the transaction closed.

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