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`: NOVEMBER26, 2024 °~
`
`DOCKETNO. X03-CV-22-6166055-S
`BBSR, LLC
`V.
`
`ANHEUSER-BUSCH, LLC
`
`MEMORANDUM OFDECISION ON
`DEFENDANT’S MOTION TO COMPEL (Docket Entry #235)
`
`This case arises out of a 2016 equity purchase agreement pursuant to which the
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`defendant, Anheuser-Busch, LLC, purchasedall equity interests in Boathouse Beverage LLC dba
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`SpikedSeltzer (“Boathouse”), the developer of a clear, alcoholic, carbonated liquid called
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`SpikedSelter. Under the purchase agreement the defendant acquiredall the rights to
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`SpikedSeltzer. The plaintiff, BBSR, LLC,is the sellers’ representative authorized to represent
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`and bindtheselling interest holders in Boathouse. In addition to a specific purchase price for the
`sellers’ interests in Boathouse, the contract includes an earnoutprovision that is the subject ofthe
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`parties’ dispute. The earnout provision provides for additional paymentsto the sellers based on
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`future sales of SpikedSeltzer over a period of three years after the closing. To preventthe
`defendant from avoiding earnout payments by launching its own competing product, the earnout
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`provision calculates earnout payments, under specified circumstances, based on the sale of such
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`competing products. The plaintiff alleges the defendant did develop competing products but
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`manipulated the implementation and administration of the contract with the intended result to
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`minimize the amounts owedto the sellers under the earnout provision. Theplaintiff seeks to
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`recover additional amounts allegedly owed underthe earnoutprovision.
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`The defendant, Anheuser-Busch, LLC, has moved to compelthe production of
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`unredacted copies ofdocuments producedbya third-party witness, Townsend Ziebold,in
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`qs
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`.
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`x
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`response to a subpoena. Mr. Ziebold isa former business advisor to Boathouse who provided
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`advice concerning the 2016 transaction. Ziebold is not a former employee or ownerofeither the
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`plaintiff or Boathouse, wasnota seller in the underlying transaction and has never been
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`represented by Boathouse’s transaction attorney, Mike McCann. Ziebold was the managing
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`director, the most senior level employee, at First Beverage Group with whom Boathouse had a
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`consulting agreement. Under the consulting agreement, First Beverage’s fee was to be
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`determined in part based on the proceeds of the earnout provision. Ziebold is no longeraffiliated
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`with First Beverage, but as a former ownerstill stands to collect a portion of First Beverage’s
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`fees generated bythe transaction, including any additional amounts the plaintiff recovers from
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`the defendant pursuant to the earnout provision.
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`In 2019 and 2020,three years after the transaction was consummated and Ziebold’s
`engagement had ended, Ziebold communicated with the plaintiff’s principals on matters related
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`to the parties’ dispute. The plaintiff’s attorneys, who undertook the representation of Ziebold in
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`connection with the subpoena, have withheld from the defendant all or part of five email
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`communications involving Ziebold andthe plaintiff’s principals, in one instance including
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`Attorney McCann,on the groundthat they are protected by the attorney-client privilege. The
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`court has reviewed the withheld documents in camera. Ziebold maintains those communications
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`are subjectto the privilege, despite Ziebold’s third-party status, pursuant to the commoninterest
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`doctrine. The assertion of that doctrine rests upon Ziebold’s interest in the outcomeof the
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`lawsuit.
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`“In Connecticut, the attorney-client privilege protects both the confidential giving of
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`professional advice by an attorney acting in the capacity of a legal advisor to those who can act
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`on it, as well as the giving of information to the lawyer to enable counsel to give sound and
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`informed advice. ... The privilege fosters full and frank communications between attorneys and
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`their clients and theréby promote[s] the broader public interests in the observation of law and
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`[the] administration ofjustice. ... The privilege applies, however, only when necessary to achieve
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`its purpose; it is not a blanket privilege.’ (Citation omitted; internal quotation marks omitted.)
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`State v. Kosuda-Bigazzi, 335 Conn. 327, 342, 250 A.3d 617 (2020)... . ‘Exceptionsto the
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`attorney-client privilege should be made only when the reason for disclosure outweighs the
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`potential chilling of essential communications.’ Metropolitan Life Ins. Co. v. Aetna Casualty &
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`Surety Co., 249 Conn. 36, 52, 730 A.2d 51 (1999); see also Ullmann v. State, 230 Conn. 698,
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`713, 647 A.2d 324 (1994) (because ‘the privilege has the effect of withholding relevant
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`information from the factfinder, it applies only where necessary to achieve its purpose’ (Internal
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`quotation marks omitted)).... It is well established that ‘voluntary disclosure of the content of a
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`privileged communication constitutes waiverof the privilege.’ (Internal quotation marks
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`omitted.) State v. Taft, 258 Conn. 412, 421, 781 A.2d 302 (2001).” Ghio v. Liberty Insurance
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`Underwriters, Inc., 212 Conn. App. 754, 772, 276 A.3d 984, cert. denied, 345 Conn. 909, 283
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`A.3d 506 (2022).
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`“[T]he commoninterest doctrine extend[s] the attorney-client privilege to any privileged
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`communication shared with another represented party’s counsel in a confidential mannerfor the
`purpose of furthering a commonlegalinterest.” Id., 782 n.9, quoting Hanover Ins. Co. v. Rapo
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`& Jepsen Ins. Services, Inc., 449 Mass. 609, 612, 870 N.E.2d 1105 (Mass. 2007). The contours
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`of the commoninterest doctrine have not been established in Connecticut. Metropolitan Life Ins.
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`Co, v. Aetna Casualty and Surety Co., supra, 249 Conn. 61. The contours of the doctrine vary by
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`jurisdiction. Energy Policy Advocates v. Ellison, 980 N.W.2d 146, 153 (Minn. 2022). In
`“c
`Hanover, the court adopted the Restatement’s “expansive” formulation of the commoninterest
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`

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`doctrine. Hanover Ins. Co. v. Rapo & Jepsen Ins. Services, Inc., supra, 870 N.E.2d 1113; see also
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`Energy Policy Advocatesv. Ellison, supra, 980 N.W.2d 153 (adopting the Restatement
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`approach); Restatement (Third) of the Law Governing Lawyers § 76 (2000).!
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`In Ellison, the Minnesota Supreme Court articulated the elements of the doctrine under a
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`Restatement approach. “{T]he common-interest doctrine applies when (1) two or moreparties,
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`(2) represented by separate lawyers, (3) have a commonlegalinterest (4) in a litigated or non-
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`litigated matter, (5) the parties agree to exchange information concerning the matter, and (6) they
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`make an otherwise privileged communication in furtherance of formulating a joint legal
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`strategy.” Energy Policy Advocatesv. Ellison, supra, 980 N.W.2d 153. In Second Circuit courts,
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`the protection afforded by the attorney-client privilege is “not waived by disclosure of
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`communications to a party that is engaged in a ‘commonlegal enterprise’ with the holder of the
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`privilege.” Schaeffler v. United States, 806 F.3d 34, 40 (2d Cir. 2015), citing United Statesv.
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`Schwimmer, 892 F.2d 237, 243 (2d Cir. 1989). The doctrine preserves “[t]he need to protect the
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`free flow of information from client to attorney logically exists whenever multiple clients share a
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`commoninterest about a legal matter.” Schaeffler v. United States, supra, 806 F.3d 40. A
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`commonlegal enterprise may be proven by showing “some agreement, whether formal or
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`informal, written or unwritten, to pursue a joint legal defense.” Denney v. Jenkins & Gilchrist,
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`362 F. Supp. 2d 407, 415 (S.D.N-Y. 2004). Another methodis to submit “affidavits from the
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`attorneys and lay representatives of both [the] parties which show thatat a specific time ... a joint
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`! Restatement (Third) of the Law Governing Lawyers § 76 (2000) provides: (1) If two or moreclients with a
`commoninterestin a litigated or nonlitigated matter are represented by separate lawyers and they agree to exchange
`information concerning the matter, a communication of any such client that otherwise qualifies as privileged under
`§§ 68- 72 that relates to the matter is privileged as against third persons. Any such client may invoketheprivilege,
`unless it has been waived by the client who made the communication. (2) Unless the clients have agreed otherwise, a
`communication described in Subsection (1) is not privileged as between clients described in Subsection (1) in a
`subsequent adverse proceeding between them.
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`defense or strategy has been decided upon and undertaken by the parties and their respective
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`counsel.” Jansson v. Stamford Health, Inc., 312 F. Supp. 3d 289, 304 (D. Conn. 2018). The party
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`claiming the commoninterest doctrine must “establish the existence of an ongoing common
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`enterprise, the existence of communications made in the courseofthat enterprise, and that those
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`communications were madeto further the enterprise.” Hybrid Athletics, LLC v. Hylete, Inc.,
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`United States District Court, Docket No. 3:17-cv-1767 (VAB) (D. Conn. Nov. 26, 2019) (2019
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`WL 6317953, *11).
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`Under any formulation of the commoninterest doctrine, the party claiming the protection
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`of the attorney-client privilege has the burden to establish the applicability of the doctrine. State
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`v. Kosuda-Bigazzi, supra, 335 Conn. 343. This includes: the burden to establish that the
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`communication in question is a protected attorney-client communicationinthefirst place,i.e. in
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`the absence ofdisclosure to the third party; an agreement between the client andthe third party
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`to engage in confidential communications; and a communicationthatis in furtherance of their
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`commoninterest. The defendant arguesthat the plaintiff has failed to establish any of these
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`elements. Having reviewed the documents in camera, the court finds that, setting aside the
`disclosure to Ziebold, several ofthe documents include materialthatis protected by the attorney-
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`client privilege.” Specifically, with referenceto the privilege log: TZ-PRIVLOG-001 includes
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`the formulation of a task to be submitted to Attorney McCann,a privileged communication; TZ-
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`PRIVLOG-002is a privileged communication between oneofthe plaintiff’s principals and
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`Attorney McCann seeking legal advice, which also includes an attachment that, standing alone,
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`? The documents submitted for in camera review did not include TZ-PRIVLOG-003. It appears that instead an
`August 17, 2018 exchange of emails between Nick Shields and Serena Shrivastava, involving the samerecipients,
`was submitted. The document submitted, bearing an identification number 251633.1, is not an attorney-client
`communication and should be producedif it has not already been disclosed.
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`is not privileged; TZ-PRIVLOG-004 discusseslitigation issues, but there is no evidence of
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`attorney involvementor evidence that the documentreflects the substance of a communication
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`with counsel and therefore the documentis not privileged; and TZ-PRIVLOG-005 contains the
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`same email presented in TZ-PRIVLOG-004 and thusis notprivileged.* To the extent that the
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`privilege does apply to these materials, however, the privilege has been waived by virtue of
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`Ziebold’s involvement in the communications unless the commoninterest doctrine applies.
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`The defendant argues furtherthat there is no evidence of a contemporaneous agreement
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`betweentheplaintiff and Ziebold that their communications would be confidential, thus
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`rendering the commoninterest doctrine inapplicable.* The court agrees but proceedsto address
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`the remaining elements of the commoninterest doctrine.
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`The defendant also arguesthat the plaintiff has not established that communicationsat
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`issue were designedto further the commoninterest between theplaintiff and Ziebold. As
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`discussed below,the nature of the interest shared between the plaintiff and Ziebold renders the
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`commoninterest doctrine inapplicable. Whatever the character and significance of that interest,
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`having reviewed the documentsandthe privilege log, the court concludesthat the
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`communications were directed at furthering that interest.
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`Onearea of divergence among courts concerning the scope of the commoninterest
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`doctrine revolves around the nature of the requisite interest in common betweentheclient and
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`the third party. Section 76, comment(e) of the Restatement (Third) of the Law Governing
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`3 The only other material redacted from TZ-PRIVLOG-005 wasa referenceto tax advice, which doesnot reflect any
`attorney involvement and was not claimed on groundsofa taxpayerprivilege.
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`4 Theplaintiff, without seeking permission of the court, attempted to supplement its arguments, after the hearing on
`this motion was completed, with affidavits from Shields and Ziebold addressing, among otherthings, this gap in the
`record. The court has granted the defendant’s motionto strike that late, unauthorized submission.
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`6
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`Lawyers states, “The communication must relate to the commoninterest, which may be either
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`legal, factual, or strategic in character. The interests of the separately represented clients need not
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`be entirely congruent.” Some courts require that the commoninterest be an identical legal
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`interest. Duplan Corp. v. Deering Milliken, Inc., 397 F. Supp. 1146, 1172 (D.S.C. 1974). Others
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`require the sharing of“at least a substantially similar legal interest.” In re Teleglobe
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`Communications Corp., 493 F.3d 345, 365 (3d Cir. 2007). The broad scope contemplated in §
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`76, comment(e) of the Restatement, recognizing interests that are “either legal, factual, or
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`strategic in character,” appears to extend the protection of the commoninterest doctrine beyond
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`common“legal” interests, but this formulation of the doctrine does not appear to have gained
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`significant support. A narrowerscope,limiting the doctrine to commonlegal interests is more
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`consistent with Connecticut law. Ullmann v. State, supra, 230 Conn. 713 (because “the privilege
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`has the effect of withholding relevant information from the factfinder, it applies only where
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`necessary to achieve its purpose”) (internal quotation marks omitted). Applying the doctrine to
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`common “factual or strategic” interests, as posited in comment (e), would unnecessarily expand
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`the scope ofthe privilege to an extent that invites misuse ofthe privilege. “[T]he congruence-of-
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`legal-interests requirement ensuresthat the privilege is not misused to permit unnecessary
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`information sharing.” Jn re Teleglobe Communications Corp., supra, 493 F.3d 365. Most courts,
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`including those that follow the Restatement, restrict the application of the doctrine to common
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`“legal” interests, although the respective interests need not be identical. Energy Policy
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`Advocates v. Ellison, supra, 980 N.W.2d 153. This court follows that approach.
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`Courts considering the application of the commoninterest doctrine often distinguish
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`between a legal interest and a financial interest. Grochocinski v. Mayer Brown Rowe & Maw
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`LLP, 251 F.R.D. 316 (N.D. Ill. 2008); Jn re Simplexity, LLC, 584 B.R. 495, 500-501 (Bankr. D.
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`Del. 2018). InGrochocinski, the court found no commoninterest existed betweenthe plaintiff
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`and a formerlitigation adversary, Spehar Capital, LLC (“SC”). SC obtained a $17 million
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`default judgment against the plaintiff. Following the entry of that judgmenttheplaintiff
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`commenced a legal malpractice lawsuit against its own attorneys,financed in part by SC in
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`exchangefora large share of any recovery in the case. The court concludedthat “SC [did] not
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`have the necessary legal interest in the case” to warrant application of the commoninterest
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`doctrine. Grochocinski v. Mayer Brown Rowe & Maw LLP,supra 251 F.R.D. 327. The court
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`noted that SC had no claims against the defendant and no involvementin the plaintiff’s claims.
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`Id. “[I]t appears that SC and[the plaintiff] have a joint financial interest rather than a joint legal
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`interest. The only interest SC has in the litigation is that it hopes it winsso that it can get money,
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`not becauseit has an actual legal interest in any of the claims. It is the commonlegalinterest, not
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`businessinterest, that is central to the application of the commoninterest doctrine.” (Internal
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`quotation marks omitted.) Id.
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`Similarly, in Simplexity the court found no commoninterest where a debtor’s bank held a
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`financial interest in a bankruptcy trustee’s recoveries in adversary proceedings. It was “clear to
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`the Court that the commoninterest which the Trustee and [the bank] shareis financial, not legal.
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`[The bank] has no legal exposure to the Trustee or Defendants. Instead, [the bank] sits on the
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`sidelines and hopesthat the Trustee... will achieve success, collect on a judgment, and pay FTB
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`its share of the proceeds. Surely that is a financial interest, not a legal one.” In re Simplexity,
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`LLC, supra, 584 B.R. 501.
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`In the present case, the defendant argues that the commoninterest doctrine does not
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`protect communications shared betweentheplaintiff and Ziebold because Ziebold’s interestis
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`purely a financialinterest in the plaintiff’s recovery from the defendant, and not a legal interest.
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`Ziebold’s interest in the case derives from his former association with First Beverage, which in
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`turn hasafinancial interest in maximizing the fees generated by its involvementin the
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`underlying transaction. While financial and legal interests may overlap, they are not the same.
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`Neither Ziebold nor First Beverage has any legal interest in the equity purchase agreement. They
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`have no standing to makelegal claims under that agreement and no exposure to any claims made
`by the defendant under that agreement. Nolegal interest heldby Ziebold will be impacted by the
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`outcome of the case. See Keller v. Keller, Superior Court, judicial district of Middlesex, Docket
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`No. FA-11-4028929-S (Dec. 2, 2016) (63 Conn. L. Rptr. 474) (no commoninterest privilege
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`protecting communications betweenplaintiff and family membersfinancing divorcelitigation in
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`exchangefor share of marital estate), cf. BBAMAircraft Management LP v. Babcock & Brown
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`LLC, United States District Court, Docket No. 3:20-cv-1056 (OAW)(D. Conn. Aug. 29, 2022)
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`(2022 WL 3716574) (commoninterest doctrine applied where there was shared interest in
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`trademark).
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`Because the commoninterest doctrine is inapplicable, Ziebold’s involvement in the
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`withheld communications waivesthe privilege to the extent it may have otherwise existed. All
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`five documents onthe privilege log must be produced to the defendant.> The plaintiff is ordered
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`to do so by December13, 2024.
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`436946
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`Farley, J.
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`> It is unnecessary for the court to review TZ-PRIVLOG-003 becausetheprivilege log identifies that documentas
`an email authored by Ziebold and-sentto the plaintiff’s principals. The plaintiff has established no basis for
`applying the attorney-client privilege to such communications.
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`9
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`