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Lex Mundi Global Attorney-Client Privilege Guide

USA, New Jersey

(United States) Firm Day Pitney LLP

Contributors Benjamin Haglund

Updated 24 Mar 2020
Is the ACP recognized in your jurisdiction?

Yes, the attorney-client privilege is recognized in New Jersey, and is codified by New Jersey Statutes Annotated (“N.J.S.A.”) 2A:84A-20 as well as under New Jersey common law.[1]

New Jersey statutory attorney-client privilege extends to communications between an attorney and his/her client during “the course of that relationship and in professional confidence,”[2] and covers all modes of communication, including oral and written.[3] 

A communication must be: 

a)    made in confidence; and  

b)    where the client is seeking legal advice, or the attorney is acting in his/her capacity as a legal advisor. [4]

The privilege generally does not protect factual documents [5] and attorney-provided business advice unrelated to legal advice.[6] The client holds the privilege and the lawyer may assert it while acting on behalf of the client. 

The attorney-client privilege does not extend:

a)    “to a communication in the course of legal service sought or obtained in aid of the commission of a crime or a fraud, or 
b)    to a communication relevant to an issue between parties all of whom claim through the client, regardless of whether the respective claims are by testate or intestate succession or by inter vivos transaction, or 
c)    to a communication relevant to an issue of breach of duty by the lawyer to his client, or by the client to his lawyer.”[7]

A communication also will not receive the protection of the attorney-client privilege where such “grave circumstances” exist that public policy concerns compel disclosure.[8] A three-part test has been adopted in order to determine whether a privilege must yield to other significant societal concerns: 

1)    there must be a legitimate need to reach the evidence sought; 
2)    there must be a showing of relevance and materiality of that evidence to the issue before the court; and 
3)    the party seeking to bar assertion of the privilege must show by a fair preponderance of the evidence including all reasonable inferences that the information cannot be secured from any less intrusive source.[9]

Notes:
[1] State v. Toscano, 12 N.J. 418, 424 (1953); In re Selser, 15 N.J. 393, 403 (1954).  
[2] N.J.S.A. 2A:84A-20(1). 
[3] Weingarten v. Weingarten, 234 N.J. Super. 318, 329 (App. Div. 1989). 
[4] Hedden v. Kean University, 434 N.J. Super. 1, 10 (App. Div. 2013).
[5] Marshall v. JPMorgan Chase Bank, N.A., No. L-5624-09, 2012 WL 1205752, at *3 (App. Div. Apr. 12, 2012). 
[6] Id. at 12.
[7] N.J.S.A. 2A:84A-20.
[8] Dontzin v. Myer, 301 N.J. Super. 501, 508 (App. Div. 1997).
[9] In re Kozlov, 79 N.J. 232, 243-44 (1979).
 

If the ACP is not recognized in your jurisdiction, are there rules of professional confidentiality or other rules that would enable a lawyer or a client to withhold attorney-client communications or work product prepared by counsel from disclosure...

Not applicable. See answer to above.

Is a distinction made in applying the ACP or professional confidentiality rules in civil and criminal proceedings? May government authorities require disclosure of attorney-client communications and legal work product?

New Jersey case law has not made a distinction in applying the attorney-client privilege and the work product doctrine in civil and criminal proceedings. [10] 

However, a lawyer is required to reveal information to the proper authorities that the lawyer believes is reasonably necessary to prevent the client or another person from: 

  1. “Committing a criminal, illegal or fraudulent act that the lawyer reasonably believes is likely to result in death or substantial bodily harm or substantial injury to the financial interest or property of another;” or
  2. “Committing a criminal, illegal or fraudulent act that the lawyer reasonably believes is likely to perpetrate a fraud upon a tribunal.” [11]

Notes: 

[10] New Jersey courts have affirmed common-law or statutory attorney-client privilege in both civil and criminal cases.  E.g.,Toscano, 13 N.J. 424; O’Boyle v. Borough of Longport, 218 N.J. 168, 194 (2014); National Utility Service, Inc. v. Sunshine Biscuits, Inc., 301 N.J. Super. 610, 616 (App. Div. 1997). 
[11] New Jersey Rules of Professional Conduct 1.6(b). 
 

In the corporate context, what test is applied to determine who within a corporation is considered the client for the purposes of the ACP? (e.g., in the U.S.: the Upjohn approach, control group test, etc.)

New Jersey applies the “control group” test to determine who within a corporation is considered the client for purposes of the attorney-client privilege.  In New Jersey, the attorney-client privilege extends to confidential communications between in-house counsel and officers, directors or employees of the companies they serve who are deemed members of its so-called “litigation control group.”  Members of the “litigation control group…include current agents and employees responsible for, or significantly involved in, the determination of the organization’s legal position in the matter whether or not in litigation, provided, however, that ‘significant involvement’ requires involvement greater, and other than, the supplying of factual information or data respecting the matter.”    However, attorney-client privilege may extend to midlevel and lower-level employees who have relevant information needed by counsel to give legal advice. [13]  

In the event of the dissolution of the corporation, the corporation’s successors, assignees, or trustees may claim the attorney-client privilege. [14]

Notes:
[13] Sipca North America, Inc. v. Donaldson Enterprises, Inc., 179 N.J. Super. 56, 60 (Law Div. 1981); Macey v. Rollins Environmental Services (N.J.), Inc., 179 N.J. Super. 535, 540-41 (App. Div. 1981). 
[14] New Jersey Rules of Evidence (“N.J.R.E.”) 504(1). 

Is in-house counsel expected to meet a higher burden than outside counsel in order to establish that privilege applies to in-house counsel’s communications?

Although the attorney-client privilege exists between a company and its in-house counsel, the privilege has its limitations in this context.  Communications to an in-house attorney are privileged when made to the attorney in his or her professional capacity.[15] Communications are protected only to the extent that they are ”legal” in nature as opposed to merely “business” in nature, such as in situations where a non-lawyer could have acted. [16]  Therefore, the nature of the relationship and the communication involved are relevant in determining whether a protectable attorney and client relationship exists. [17]

Notes: 

[15] E.g., United Jersey Bank v. Wolosoff, 196 N.J. Super. 553, 562 (App. Div. 1984).
[16] Hedden, 434 N.J. Super. at 12.
[17] Wolosoff, 196 N.J. Super. at 562.
 

Civil Law Jurisdictions: May in-house counsel assert privilege or professional confidentiality?

New Jersey is a common law jurisdiction.

Civil Law Jurisdictions: Is in-house counsel allowed to be active members of your jurisdiction’s bar?

This question is not applicable to New Jersey.

Is the common interest doctrine recognized in your jurisdiction?

Yes, the common interest doctrine is recognized in New Jersey. [18]

 

Notes:

[18] O’Boyle, 218 N.J. at 190.

How is the doctrine articulated in your jurisdiction?

The common interest rule protects communications made to a co-party or non-party who shares the client’s interests.[19] For the common interest rule to apply:

  1. The disclosure must be made due to actual or anticipated litigation; 
  2. For the purposes of furthering a common interest; and 
  3. The disclosure must be made in a manner that is not inconsistent with maintaining confidentiality against adverse parties.[20]

 The doctrine can apply if the parties merely share a “common purpose.” The parties need not share identical interests, and do not even need to be involved in the same litigated matter or anticipated matter for the doctrine to apply.[21] Also, in order to receive common interest protection, the communication does not need to be between the parties respective legal counsel, and can apply to communications between counsel for one party and a non-attorney representative of another party who shares a common interest with the client.[22]  The common interest privilege applies to both civil and criminal proceedings.[23]


Notes:
[19] Id. 
[20] Id. 
[21] Id. at 199. 
[22] Id. at 194. 
[23] Id. at 193. 
 

Must a common interest agreement be in writing?

No, New Jersey courts do not require a written common interest agreement to apply the doctrine. However, it is in the best interest of the client to memorialize the common interest agreement in writing.

Is litigation funding permitted in your jurisdiction? Are there any professional rules in this respect?

There is a dearth of legal authority in New Jersey addressing litigation funding.  Although there are no New Jersey professional conduct rules regarding litigation funding specifically and New Jersey courts have not discussed litigation funding or legal financing in-depth, it is worth noting that there are several companies that offer litigation funding for New Jersey matters. Whether litigation funding is permitted would be evaluated on a case by case basis based on the general rules of professional conduct.

Have the courts in your jurisdiction addressed whether communications with litigation funders may be protected by the ACP or the work-product protection

As stated above, New Jersey courts have not addressed litigation funding in depth. New Jersey federal courts have held in multidistrict litigations that discovery regarding litigation funding is generally not allowed if the litigation funding information is irrelevant to the claims and defenses at issue. When disputes regarding the discoverability of litigation funding arise, the court may conduct an in-camera review of the litigation funding documents if: 

  1. a parties’ counsel requests in camera review; or
  2. good cause exists to believe that a litigation financer has control or input into the parties’ litigation decisions.[24]

Because there is a dearth of case law on this issue, it is unclear if this test applies outside of multidistrict ligation suits.  

Notes:

[24] In re Valsartan N-Nitrosodimethylamine (NDMA) Contamination Products Liability Litigation, 405 F. Supp. 3d 612, 619 (D.N.J. 2019). 


 

Is the crime-fraud exception recognized in your jurisdiction?

Yes, New Jersey recognizes the crime-fraud exception.[25] See answer to Question "Is the ACP recognized in your jurisdiction?"

Notes:

[25] N.J.S.A. 2A:84A-20(2); N.J.R.E. 504(2)(a).

What statutes or key court decisions articulate the crime-fraud exception in your jurisdiction?

The attorney-client privilege does not extend “to a communication in the course of legal service sought or obtained in aid of the commission of a crime or a fraud.”[26]The exception is not limited to criminal or civil offenses. The “fraud” portion of the exception is interpreted broadly to include “any use of legal process for a purpose other than a legitimate one.”[27] 

The “crime-fraud” exception to the attorney-client privilege applies whether the attorney knows of the forbidden goal or is unaware of the client’s criminal or fraudulent intent.[28] The crime-fraud exception can apply even when an otherwise privileged communication contains evidence or suggestions of false information.[29]

The party seeking to overcome the attorney-client privilege based on the crime-fraud exception must make a prima facie showing of fraud or crime, or a showing of probable cause that a crime or fraud has been committed or attempted, through evidence other than the communication itself.[30]

New Jersey Court Rule 4:10-2(c) is New Jersey’s analogue to Federal Rule of Civil Procedure 26(b)(3), which protects an attorney’s work product.[31] Pursuant to Rule 4:10-2(c), a party may not obtain discovery of documents, electronically stored information and tangible things otherwise discoverable if the material was prepared in anticipation of litigation, trial or for another party. 

Notes:

[26] N.J.S.A. 2A:84A-20(2)(a); accord Fellerman v. Bradley, 99 N.J. 493, 503 (1985).
[27] National Utility Service, 301 N.J. Super. at 616 (internal quotation marks omitted). 
[28] Ocean Spray Cranberries, Inc. v. Holt Cargo Systems, Inc., 345 N.J. Super. 515, 522 (Law Div. 2000). 
[29] Id. 
[30] Id. at 523 (holding the privileged memorandum at issue to be under the crime-fraud exception where the plaintiff presented false interrogatory answers as evidence, bolstering deposition testimony of defendant’s employees, and certification of physical evidence). 
[31] Miller v. J.B. Hunt Transport, Inc., 339 N.J. Super. 144, 148 (App. Div. 2001).

Is there a statute or rule that protects information obtained or prepared in anticipation of litigation from disclosure in legal proceedings? (In the U.S.: What state rule is your jurisdiction’s analog to FRCP 26(b)(3)?)

A document is considered to have been prepared in anticipation of litigation, and thereby, protected as attorney work product if the ‘dominant purpose’ in preparing the document was concern about potential litigation and the anticipation of litigation was ‘objectively reasonable.’[32]   Documents may still be eligible for work product protection even if they do not include legal advice.[33]   However, a document prepared in the ordinary course of business is not entitled to work-product protection. [34]   

Work product privilege is not absolute and can be disregarded if the party moving for disclosure shows that it has substantial need for the documents in the preparation of the case and is unable to obtain their substantial equivalent by other means without undue hardship.[35]  In such a case, the court may order discovery, without allowing for disclosure of the “mental impressions, conclusions, opinions, or legal theories of any attorney or other representative of the party.” [36]

Notes:

[32] Id. at 149; R. 4:10-2(c). 
[33] Rivard v. American Home Products., Inc., 391 N.J. Super. 129, 155 (App. Div. 2007). 
[34] Miller, 339 N.J. Super. at 148. 
[35] Id.
[36] Rivard, 391 N.J. Super. at 155 (quoting Jenkins v. Rainner, 69 N.J. 50, 55 (1976)); accord R. 4:10-2(c). 
 

What are the elements of the protection in your jurisdiction?

No, New Jersey does not recognize accountant-client privilege.[37]

Notes:

[37] First National State Bank of New Jersey v. Kron, 190 N.J. Super. 510, 512 (App. Div. 1983) (stating that accountant client privilege was “non-existent”); Robert J. Oleiar, Forensic Accountants in Business Litigation, 250 N.J Law. 67, 71 (Feb. 2008) (“… [T]here is no accountant-client privilege in New Jersey.”).

Does your jurisdiction recognize an accountant-client privilege?

N/A

Does your jurisdiction recognize a mediation privilege?

Yes, N.J.S.A. 2A:23C-4 provides that a mediation communication is privileged and not subject to discovery or admissible in evidence unless waived or precluded.[38]  While the privilege is absolute, “evidence or information that is otherwise admissible or subject to discovery shall not become inadmissible or protected from discovery solely by reason of its disclosure or use in a mediation.[39]

Notes:
[38]See generally Kernahan v. Home Warranty Administrator of Florida, Inc., 236 N.J. 301, 323 (2019). 
[39] N.J.S.A. 2A:23C-4(c). 

Does your jurisdiction recognize a settlement negotiation privilege?

Yes, New Jersey recognizes settlement negotiation privilege. Offers of compromise or any payment in settlement are not admissible to prove liability or amount of the disputed claim.[40] However, such evidence will not be excluded if offered for another purpose. 

Notes:
[40] N.J.R.E. 408. 

Lex Mundi Global Attorney-Client Privilege Guide

USA, New Jersey

(United States) Firm Day Pitney LLP

Contributors Benjamin Haglund

Updated 24 Mar 2020