On April 19, 2024, Justice Borrok of the New York County Commercial Division issued a decision in Mesquite Cr. Wind LLC v. Mars Wind, Inc., 2024 NY Slip Op. 31470(U), holding that a party did not waive the attorney-client privilege by communicating with outsiders who were working on the party’s behalf, explaining:
Employees of Duke and Sumitomo and Sumitomo ‘s subsidiaries are agents of Mesquite Disclosure of attorney-client communications to a third party or communications with an attorney in the presence of a third party who is not an agent or employee of counsel vitiates confidentiality required for asserting attorney-client privilege. The concept of agency in the attorney-client context is not defined by the third party’s employment or function, however, but rather depends upon whether the client had a reasonable expectation of confidentiality under the circumstances. In New York, the proponent of the privilege bears the burden of demonstrating that disclosure to the third-party agent was necessary, not merely helpful. The absence of a formal agent-principal relationship is not fatal to this exception, as the scope of the privilege is not defined by the third parties’ employment or function but rather depends on whether the client had a reasonable expectation of confidentiality under the circumstances.
In the instant case, as in Lebedev, it appears that Mesquite maintained no employees of its own and could only act through the joint venture partners’ personnel. Accordingly, if Mesquite were to ever act on legal advice, it necessarily had to act through someone – i.e., Sumitomo or its subsidiaries’ employees or Duke’s employees. That some of these employees were not officers or directors is also not a bar to the assertion of privilege. It also does not matter that there were 41 recipients or that Mesquite under the circumstances presented here has not demarcated the role of each and every individual on a given communication. For the avoidance of doubt, it also does not matter that the Services Agreement indicates that neither Mesquite nor Duke are agents of each other because the lack of a formal agent-principal relationship is not determinative in the attorney-client agency privilege analysis. As discussed above, unquestionably under the circumstances presented here, Duke and Sumitomo and their employees were agents of Mesquite for the purposes of receiving legal services from Outside Counsel.
As such, Mesquite’s assertion of the agency exception is proper as to communications including Duke or Sumitomo personnel that were to or from attorneys with whom Mesquite had an attorney-client relationship – Outside Counsel, 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.
(Internal quotations and citations omitted).