In re Quigley Co

In In re Quigley Co. [SD NY 2009] the Bankruptcy Court resolved whether documents created solely in anticipation of an asbestos bankruptcy could be considered legal, as opposed to commercial, in connection with the common-interest privilege. It explained that "[a]sbestos bankruptcies, by their nature, are designed to stop existing and threatened litigation" (id.). Accordingly, it concluded that a legal interest--for the purposes of establishing privilege--could be furthered through the asbestos bankruptcy, further explaining that "although bankruptcies are typically filed to address financial problems, and indeed, the numerous lawsuits had created financial problems . . ., this chapter 11 case was filed to resolve mass tort litigation". Pfizer and Quigley withheld documents, asserting various privileges. The Ad Hoc Committee of Tort Victims moved to compel, among other documents, communications between the attorneys for Quigley, the FCR, the Committee and Pfizer. Discussing the relationship of the parties, the Bankruptcy Court explained that "the Committee and the FCR do not necessarily share a common interest with Quigley and Pfizer in this case. In fact, they are adversaries. The Committee's members and constituents have been litigating against Quigley and Pfizer since before the chapter 11 case was filed. The chapter 11 stayed those litigations. Quigley and Pfizer seek, through confirmation under 524(g), to discharge their present and future liability, and channel the claims into the Trust" The Bankruptcy Court nevertheless considered whether a common-interest privilege could still apply: "Advice discussed during negotiations with an adversary in the absence of circumstances supporting a reasonable expectation of confidentiality is not entitled to protection. Thus, notwithstanding the FCR's and the Committee's current support of the Plan, the party asserting the common interest privilege--Quigley or Pfizer, or both--must demonstrate, at a minimum, that they shared communications with the Committee or the FCR in furtherance of a common interest at that time" (id.).