On November 22, 2022, the First Department issued a decision in Pala Assets Holding Ltd. v. Rolta, LLC, 2022 NY Slip Op. 06642, holding that a CEO’s testimony that a company acted on the advice of counsel waived the attorney-client privilege, explaining:
Deposition testimony by the CEO and Chairman of defendants’ corporate parent, Rolta India, waived defendants’ attorney-client privilege as to communications had with various counsel representing them in New York courts and in India. The CEO’s testimony that defendants did not comply with post-judgment orders calling for a turnover of assets to a receiver because the turnover and receivership orders had yet to be domesticated in India in accordance with Indian law affirmatively placed the subject matter of their privileged communications in litigation. The CEO testified, among other things, that defendants’ counsel in India advised noncompliance with the post-judgment orders pending domestication of such orders in India, and that defendants’ U.S. counsel would yield to the advice of its Indian counsel on the matter. Thus, invasion of the privilege was required for plaintiffs to adequately contest the validity of defendants’ defense in failing to comply with the turnover and receivership orders, particularly inasmuch as contempt proceedings had already been brought against the president of Rolta India’s primary subsidiary, and additional contempt proceedings were in the process of being commenced against other principals.
Insofar as defendants argue that the CEO only testified on behalf of Rolta India, and that any purported waiver of privileged communications had to be restricted to communications between Rolta India and its counsel, and not to any attorney communications had by the other defendants, the argument is unavailing. In the context of disclosure, a showing of common interest between parties, as might hold various parties mutually bound to the requirements of a disclosure order, may be evidenced by dual representation or a shared defense or strategy between defendants, notwithstanding that the parties might be separately represented. Here, there is both dual representation and evidence of a defense strategy shared by defendants.
(Internal quotations and citations omitted).