# IN THE SUPREME COURT O F TEX AS

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### N O



### . 10-0960

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## I N R E 

## X L S P E C IA L T Y 

## I N S U R A N C E 

## C O M P A N Y A N D 

## C A M B R ID G E 

## I N T E G R A T E D



## S E R V IC E S 

## G R O U P 

## , I N C



## . , R E L A T O R S

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### O N 

### P E T I T I O N F O R 

### W R I T O F 

### M A N D A M U S

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### Argued Novem ber 10, 2011

C H I E F 

### J U S T I C E 

### J E F F E R S O N 

### deli v ered the opinion of the Court, in which J U S T I C E 

### H E C H T 

### , J U S T I C E 

### W A I N W R I G H T 

### , J U S T I C E 

### M E D I N A 

### , J U S T I C E 

### G R E E N 

### , J U S T I C E 

### J O H N S O N 

### , J U S T I C E 

### G U Z M A N 

### , and J U S T I C E 

### L E H R M A N N 

### joined.

J U S T I C E 

### W I L L E T T 

### delivere d a dissenting opinion.

W e must decide whether , in a bad faith action broug ht by an injured employ ee ag ains t a
worke rs’ compensa tion insurer, the attorney –client privileg e protec ts communications betwee n the
insurer’ s lawy er and the employ er during the underly ing administrative proce eding s. We hold that the privileg e does not a

pply

. I. Background

XL Specialty I nsuranc e Company is Cintas Corporation’s worke rs’ compensa tion insure r.
XL ’s policy included standard provisions requiring Cintas to cooper ate in the inves t i gat ion, settlement, and defe nse of a claim. The policy also provided for a one milli on dollar deductible per
claim.

### J erome Wagne r, a C i n t as em ploy ee, soug ht worke rs’ compensa tion benef its for a workrela ted injury

. Melissa Martinez, a claims adjuster with XL ’s third party administrator, Cambridg e
I nteg rate d Service s Group, I nc., denie d the claim. I n a conte sted ca se hearing befor e the Division
of W o rkers’ Compensation, the hear ing office r deter mined that Wagne r sustained a compensa ble injury and was entitled to medical and temporar y income benef

its. During the course of the
administrative litiga t i o n , XL ’s outside counsel, Rebec ca Strandwitz of Flahive , Og den & L atson, P.C., sent communications about the status and the evalua tion of the proce eding s to Cambridg e and
Cintas.
After the workers’ compensation dispute was resolved, W ag ner sued XL , Cambridg e, and
Martinez for b re ac h of the common law duty of g ood faith and fair dealing and violations of the

I n s u ra n ce Code and Texas Dec eptive Trade Practice s Act. During discovery , Wagne r soug ht th e
communica t i o n s made betwee n Strandwitz and the insured, Cintas, during the administrative

proce eding s. XL and Cambri d ge ar gued that the attorney –client privileg e protec ted those
communications. After an in-ca mera inspection, the trial court held that the privileg e did not apply

. XL an d C am b ridg e soug ht mandamus relief from the court of appea ls, which denied the petition.
___ S.W .3d ___, ___. They then petitioned this Court for a writ of mandamus, arg uing that
the attorne y -client privileg e prote cts the communica tions.

II. Attor ney–Client P rivilege in Multi-Par ty Litigation
Confidential communications betwee n client and coun s e l ma d e to fac ilitate leg al service s are
g ener ally insulated from disclosure. See T E X



### . R. E V I D



### . 503(b); Huie v. DeShazo , 922 S.W .2d 920,
9 2 2 (T ex
. 1996). Recog nized as “the oldest of the privileg es for confide ntial communicat i o n s

2

### known to the common law,” United States v. Zolin , 491 U.S. 554, 562 (1989) (citation omitted), the

attorney –client privileg e promotes f ree discourse betwee n attorney and client, which advanc es the
eff ective a dminist ration of justice. Republic Ins. Co. v

. Davis , 856 S.W .2d 158, 160 (Tex. 1993)

. But a strict rule of confide ntiality may also suppress rele vant evidenc e. Id. For that rea son, “[c]ourts
balanc e this conflict betwee n the desire for op en ness and the need for confide ntiality in
attorney –client rela tions by restric ting the scope of the attorney –client privileg e.” Id

. The privileg e
belon gs t o t h e client and must be invoked on its behalf

. W est v. Solito , 563 S.W .2d 240, 244 n.2 (Tex. 1978). Texas evidentiary

rules def ine the privileg e as f

ollows:
A client has a privileg e to ref use to disclose and to preve nt any o t h er p erson from disclosing confide ntial commu n i ca t i o ns made for the purpose of fac ilitating the rendition of prof

essional leg al servic es to the client: (A) betwee n the client or a repr esenta tive of the client and the client’s lawy er or a re prese ntative of the la

wy er; (B ) betwee n the lawy er a nd the lawy er’ s repr esenta tive; (C) b y the client or a repr esenta tive of the client, or the client’s lawy er o r a repr esenta tive of the law y er, to a lawy er or a repr esenta tive of a lawy er repr esenting another party in a pending action and conce rning a matter of common interest ther ein; (D) b et we en re p re s en t at i v es o f the client or b et we en t h e cl i en t an d a repr esenta tive of the c lient; or (E) among lawy ers a

nd their re prese ntatives repr esentingthe same c lient.

3

### T E X



### . R. E V I D 

### . 503(b). 1



### Rule 503(b) prote cts not only confide ntial communications betwee n the lawy er a nd client,
but also the discourse among their repr esenta tives. I t is an exception to the g ener al principle that the privileg e is waived if the lawy er or client voluntarily discloses privileg ed communications to a third
party

. See T E X



### . R. E V I D



### . 511(1).

XL relies primarily on the privileg e define d in Ru le 5 0 3 ( b ) ( 1 ) ( C)—which has been variously 2


### descr ibed as the “joint client” privileg e, the “joint defe nse” privileg e, and the “common interest” privileg e. Courts sometimes use these terms intercha ng eably , but they involve distinct doctrines that

serve d i ff er en t purposes. As we explain below, howeve r, none of them acc urate ly descr ibes the privileg e at issue in this case

.

Alt hough m any of our eviden ti ar y rule s mirr or the ir fe der al cou nte rpa rt s, see , e.g

. , F E D

. R. E V I D

. 1 801; T E X

. R. E V I D

. 801, the re is no fe der al ana logue to our Rule 503. I n 1972 , the Chie f J ust ic e of the Unit ed Sta te s pro pos ed to Congres s the Rule s of Evidenc e for Unit ed Sta te s Cour ts and Ma gistr at es. 56 F.R.D. 183 (19 72)

. T he Pro pos ed Rule s wer e dra ft ed by the J udi ci al Conf er enc e Advisor y Com

m it te e on the Rule s of Evidenc e and app r o ve d by t he J udi ci al Conf er enc e of the Unit ed Sta te s and the Supr eme Co urt

. Jaf fe e v. Redmo nd , 518 U.S. 1, 8 n.7 (19 96)

. T he Pro pos ed Rule s def ine d nin e s p eci fi c te st imonial pri vileges, inc lud ing the la wyer–cl ie nt pri vilege, whi ch wa s c ont ai ned in Pro pos ed Ru le 503

. See P R O P O S E D F E D

. R. E V I D

. 503, rep ri nte d in 56 F.R.D. 183, 235-40 (19 72)

. Congres s re j ect ed Pro pos ed R u l e 5 0 3 i n fa vor of Fede ra l Rule of Evidenc e 501’ s genera l m and at e tha t “t he pri vilege of a wit nes s
. . . sha ll be gov er ned by the pri nci ple s of the comm on la w as the y may be int er pre te d by t he cou rt s of the Unit ed Sta te s in t h e l i gh t of
re aso n and exp er ie nce ,” al tho ugh “i n ci vil act ion s and pro cee din gs, wit h re spe ct to an el ement of a cl ai m or def ens e as to whic h Sta te la w sup pli es the rul e of dec is ion , the pri vilege of a wit nes s
. . . sha ll be det er m ine d in acc ord anc e wit h Sta te l a w.” F E D

. R. E V I D

. 501 (19 75) (a m end ed 2011 ). “Al tho ugh Congres s did not ado pt thi s rul e, cou rt s have re li ed upon [Pr opos ed Rule 503] as an acc ura te def ini ti on of the fe der al comm on la w of at tor ney 

### –client pr ivil ege . . . .” Unit ed S tat es v. S pec tor , 793 F.2d 932 , 938 (8 th Cir . 198 6).
For eas e of re fe re nce , we re fe r to re la tor s X L and Cam bri dge as “X L.” T hei r le gal ar gum ent s ar e 2 ide nti cal , an d ou r c onc lus ion th at th e pr ivil ege doe s no t a ppl y here di spo ses of bot h of th ei r c la ims.
4

### A. Joint Client P rivilege

The j o i n t cli ent or co-c lient doctrine applies “[w]hen the same attorney simult aneously

repr esents two or more clients on the same matter.” P A U L 

### R. R I C E 

### , A T T O R N E Y 

### –C L I E N T 

### P R I V I L E G E

I N T H E 

### U

N I T E D 

### S T A T E S 

### § 4:30 (2011). J oint repr esenta tion is permitted when all clients consent and
there is no substantial risk that the lawy er’ s repr esenta tion of o n e client would be materia lly and
adver sely aff

ecte d b y the lawy er’ s duties to the other. 2 R E S T A T E M E N T 

### (T H I R D 

### ) O F T H E 

### L A W


### G O V E R N I N G 

### L A W Y E R S 

### § 128 (2000). “Where [an] attorney acts as counsel for two parties,
communications made to the a ttorney for the pur

pose of f acilitating the re ndition of leg al servic es

to the clients are privileg ed, except in a controve rsy betwee n the clients.” In re JDN Real Estate–McKinney L.P. , 211 S.W .3d 907, 922 (Tex. App.—Dallas 2006, pet. denied) ; see also T E X



### . R. E V I D 

### . 503(d)( 5) (noting that communications made by two or m ore clients to a lawy er retained
in common are not privileg ed “w hen off ere d in an ac tion between or among any

of the c lients”).

B. Joint Defense and Com m on In ter est Doc trines Represe ntations involving multipl e clients with se para te counsel call for the application of
what have been called the joint defe nse and common interest doctrines. Courts and parties often
confuse the rele vant nomenclatur e. See In re Teleglobe Commc’n Corp ., 493 F.3d 345, 363 n.18 (3d
Cir. 2007) (“[M]uch of the case law confuse s the community -of- interest privileg e (which is the same

as t he ‘common-interest privil eg e’ .

. . ) with the co- client privileg e.”) (citation om itted). Unlike 3

See als o 24 C H A R L E S A L A N W R I G H T & K E N N E T H W. G R A H A M , J R ., F E D E R A L P R A C T I C E A N D 3 P R O C E D U R E § 54 9 3 ( 1 9 86) (“ Fede ra l cou rt s con ti nue to con fus e the al li ed la wyer doc tr ine , whic h app li es when par ti es wit h separ at e lawyers con sul t togeth er , and the j oin t- cl ie nt doct ri ne, whic h appli es when two cl ie nts sha re the same la wyer, by usi ng the phr ase ‘j oin t def ens e pri vilege’ to m angle the two conc ept s.” ).

5

### the joint client rule, the joint defe nse and common interest rules apply when there has been sharing

of information betwee n or among separately represe nted parties. See 1 R E S T A T E M E N T 

### (T H I R D 

### ) O F

T H E 

### L A W 

### G O V E R N I N G 

### L A W Y E R S 

### § 75 cmt. c (“Co-c lient repr esenta tions must also be distinguished
from situations in which a lawy er repr esents a single client, but another person with allied interests

cooper ates with the c lient and the client’ s lawy er . . . .” ).
The joint defe nse rule ap p l i es when multipl e parties to a lawsuit, eac h repr esente d by
differ ent attorney s, communicate among themselves for the purpose of forming a common defe nse strateg y
. In re JDN

, 211 S.W .3d at 923. Unlike the common interest doctrine, t h e j o i n t d ef ense
doctrine applies only in the context of litigation. V I N C E N T 

### S. W A L K O W I A K 

### , T H E 

### A T T O R N E Y 

### –C L I E N T


### P R I V I L E G E I N 

### C I V I L 

### L I T I G A T I O N 

### 18 (4th ed. 2008).
The common interest rule (also known as t he “community of i ntere st,” “pooled interes ts,”

or “allied lawy er” doctrine) is more expansive than the joint def ense doctrine. The parties must

4



### share a mutual interest, but unlike the joint defe nse doctrine, the common in t er es t rule applies to
“two or more separ ately repr esente d persons whateve r their denomination in pleading s and whether

or not involved in litigation.” 1 R E S T A T E M E N T 

### (T H I R D 

### ) O F T H E 

### L A W 

### G O V E R N I N G 

### L A W Y E R S 

### § 76

repor ter’s n o t e cmt. b; see also R I C E 

### § 4:35, 474–75 (“The ‘community of interest’ rule is distinguished from the ‘joint defe nse’ rule by the fac t that the collabora tion betwee n the parties need

T hus , the comm on int er est doc tr ine is dif f e r e n t fr om the j oin t cl ie nt doc tr ine for the very same 4
re aso n as the j oin t def

ens e doc tr ine : unl ike the j oin t cl ie nt si tua ti on, in the comm on int er est ar ra nge me n t , e a c h c li ent has her own la wyer—t hey ar e not j oin tl y re pre sen te d by one la wyer. 2 C H R I S T O P H E R B

. M U E L L E R & L A I R D C

. K I R K P A T R I C K , F E D E R A L E V I D E N C E § 5:2 0 (3d ed. 2007 ); see als o 1 R E S T A T E M E N T (T H I R D ) O F T H E L A W G O V E R N I N G L A W Y E R S § 76 cmt. a (20 00) (no ti ng tha t the comm on int er est rul e “di ff er s fr om th e c o- cl ie nt rul e of

[p ri vilege] in th at th e c li ent s a re re pre sen te d by sep ar at e l awyers ”)

. 6

### not be rela ted to a pending leg al action.”)

. Thus, plaintiffs and nonlitigating persons with common

interests can asser

t this exception to the waiver ru l e. 1 R E S T A T E M E N T 

### (T H I R D 

### ) O F T H E 

### L A W


### G O V E R N I N G 

### L A W Y E R S 

### § 76 repor ter’s note cmt. b (noting that common interest is the pref era ble term
beca use it includes “both claiming as well as defe nding parties and nonlitigating as well as litigating persons” )

. 5



### III. Texas Rule of E vidence 503(b)(1) (C)—The Allied Litigant Doctr ine
Courts of appea ls have g ener ally applied Rule 503(b)( 1)(C) to joint defe nse situations wher e multipl e defe ndants, repr esente d by separ ate counsel, work toge ther in a common d e f ense. Notably , 6


### and in contra st to the proposed fede ral rule, Texas require s that the communications be made in the 7

See als o, e

. g

. , In re Gran d Jur y Subp oen a , 274 F.3d 563, 572 (1s t Cir

. 2001 ) (“ Beca use the 5 pri vilege someti m es m ay app ly out si de the con te xt of act ual li ti gatio n, what the par ti es cal l a ‘j oin t def ens e’ pri vilege i s more a ptl y ter m ed t he ‘ comm on i nte re st ’ r ule .”)

. See , e.g. , In re JDN Real Est ate —M cKi nne y L.P. , 211 S.W .3d 907, 922 (T ex. App.— Dal la s 2006 , 6 ori g. pr oce edi ng [ m and

. den ie d]) (“ [R] ule 503 ( b )( 1)( C)

. . . add re ss[ es] the j oin t- def ens e pri vilege, whic h app l ie s when m

ult ipl e par ti es to a la wsui t re pre sen te d by dif fe re nt at tor neys comm

uni cat e among the m sel ves.”) ; In re Dalc o , 186 S.W .3d 660, 666 (T ex. App.— Beau m ont 2006 , ori g. pro cee din g [mand. den ie d]) (“

. . . [T ]he ‘j oin t def ens e pri vilege,’ fou nd in T E X

. R. E V I D

. 503( b)( 1)( C)[ ,]

. . . [w] hen app li cab le

. . . ‘c loa ks comm

uni cat ion s with con fi den ti al it y wher e “a j oin t def ens e ef for t or st ra te gy has bee n dec ide d upon and unde rt aken by the par ti es and the ir re spe ct ive couns el .”’ ” (quot ing Unit ed Stat es v. Gott i , 771 F. Supp . 535 , 545 (E. D.N.Y. 199 1))

. See P R O P O S E D F E D

. R. E V I D

. 503( b)( 3), rep ri nte d in 56 F.R.D. 183, 236 (19 72) (pr ote ct ing 7
comm uni cat ion s bet ween a cl ie nt “t o a la wyer re p r e s e n t i n g an oth er in a m at te r of comm on int er est ”) ; see als o, e.g. , In re Sant a Fe Int ’l Corp

. , 272 S.W .3d 705, 710 (5t h Cir

. 2001 ) (no ti ng tha t the comm on int er est pri vilege app li es to bot h comm uni cat ion s bet ween co- def end ant s in act ual li ti gatio n and the ir cou nse l as wel l
as to “co m

m uni cat ion s bet ween pot ent ial co- def end ant s and the ir cou nse l” (e m pha si s in ori ginal )) ; Unit ed Sta te s v. Sch wimmer , 892 F.2 d 2 3 7 , 243– 44 (2d Cir

. 1989 ) (“ ‘T he nee d to pro te ct the fr ee fl ow of inf ormati on fr om cl ie nt to at tor ney logic al ly exi st s whene ver m ult ipl e cl ie nts sha re a comm on int er est abo ut a le gal m at te r,’

. . . and it is the re for e unne ces sar y tha t the re be act ual li ti gatio n in pro gress for the comm on int er est ru le of

th e a tt orn ey–cli ent pr ivil ege to app ly . . . .” (c it at ion s omitt ed) ).
7

### context of a pending action. See T E X



### . R. E V I D



### . 503(b)( 1)(C) (protec ting from dis cl osure 8


### communications betwee n a client “to a lawy er
. . . repr esenting another party in a pending action and

conce rning a matter of common interest there in”) (empha sis added)

. Alt h o u gh criticized, the 9 1 0 

### pending action require ment limit s the privileg e “to situations wher e the benef it and the nece ssity are

at their highe st, and

. . . restric t[ s] the opportunity for misuse.” United States v. Duke Energy Corp. , 214 F.R.D. 383, 388 (M.D.N.C. 2003). Thus, in jurisdictions like Texas, which h av e a pending
actio n require ment, no commonality of interest exis ts absent actua l litigation. Acc ording ly , our privileg e is n o t a “c o mmon interest” privileg e that extends bey ond litigation. Nor is it a “joint
defe nse” pr ivilege , as it applies not just to defendants but to any parties to a pe nding a ction. Rule 503(b)( 1)(C)’ s privileg e is more a ppropriate ly

termed a n “allied litiga

nt” privileg e. 1 1

A number of oth er st at es’ eviden ti ar y rul es al so re qui re comm uni cat ion s to be m ade in the con te xt 8 of pen din g li ti gatio n in ord er for the doc tr ine t o app ly. See , e.g. , H A W

. R. E V I D

. 503( b) (pr ote ct ing
comm uni cat ion s m ade “by the cl ie nt . . . to a la wyer .
. . re pre sen ti ng ano the r par ty in a pen din g act ion and
con cer nin g a m at te r of comm on int er est ”) ; M E

. R. E V I D

. 502( b)( same); M I S S

. R. E V I D

. 502( b)( same); N.H. R. E V I D

. 502( b) (s ame); O K L A

. S T A T

. ti t. 12 § 2502 (B) (3) (s ame); S.D. C O D I F I E D L A W S § 19- 13- 3 (same). I n add it ion , Unif

orm Rule o f Evidenc e 502( b)( 3) al so inc lud es a “pe ndi ng act ion ” re qui re m ent

. U N I F

. R. E V I D . 502 (b) (3)

. See als o In re Dalc o , 186 S.W .3d at 666– 67 (“ Ru l e 5 0 3(b )( 1)( C) app ear s to at ta ch the comm on 9 int er est ‘pr ivil ege’ to con fi den ti al comm uni cat ion s dis cl ose d in the cou rs e of le gal ser vices re nde re d dur ing
some ‘ pen din g act ion ’ and ‘c onc ern ing a matt er of common int ere st the rei n .’

. . . Her e,
. . . thi s con tr act ual
re li nqui shment of Cit iba nk’s con fi den ti al or pro pri et ar y inf ormati on to Univers al did not occ ur dur ing any ‘pe ndi ng act ion ’ and the re for e cou ld not con cer n ‘a m at te r o f c o mmo n int er est the re in. ’” (e m pha si s in ori ginal ) ( ci ta ti ons omitt ed) ).
Se e Kat ha ri ne Tra y lo r S ch af fz in , An Unce rt ain Pri vi le ge: W hy the Common Int ere st Doct ri ne Does 10 Not W ork and How Unif

ormi ty Can Fix It , 15 B.U. P U B

. I N T

. L.J

. 49, 77–7 8 (20 05) (no ti ng tha t the pen din g act ion re qui re m ent is re dund ant of oth er saf eguard s and har m ful bec aus e it fa il s to pro te ct comm uni cat ion s sha re d be twe en t hos e wi th a c om m on l egal i nte re st unr el at ed t o l it igati on)

. A le adi ng fe der al la w tr eat is e sugg est s tha t the app rop ri at e m oni ker is the “al li ed la wyer doc tr ine .” 11 24 C H A R L E S A L A N W R I G H T & K E N N E T H W. G R A H A M , J R ., F E D E R A L P R A C T I C E A N D P R O C E D U R E § 5493
8

### The a llied liti g ant doctrine protec ts communications made betwe en a c lient, or the client’s

lawy er, to another party ’s lawy er, not to the other party itself. See, e.g. , Robert Bosch, LLC v. Pylon Mfg. Corp. , 263 F.R.D. 142, 146 (D. Del. 2009) (“[T]o qualify for an d t o maintain continued
protec tion [under the common interest privileg e], the communication must be share d betwee n
counsel.” ); W A L K O W I A K 

### , at 18 (noting that the joint defe nse doctrine “does not apply to

. . . communications [m ade direc tly to] other parties themselves”)

. This attorney -shar ing require ment 1 2


### makes c lear that the privileg e applies only when the pa

rties have separ ate c ounsel. See, e .g. , In re Teleglobe , 493 F.3d at 365 (“[T]he [common interest] privileg e only applies when clients are
repr esente d by separ ate counsel.” ); Griffit h v. Davis , 161 F.R.D. 687, 692 (C.D. Cal. 1995) (“The

(19 86)

. Othe r sou rc es re fe r to a “j oin t li ti gant” exc ept ion

. See , e.g. , J ames M. Fis che r, The Att orn ey– Cli ent Pri vi le ge Me et s the Common Int ere st Arr ange ment : Prot ect ing Conf ide nce s W hil e Exc hang ing Inf

orma ti on for Mu tua l Gain , 16 R E V

. L I T I G

. 631, 633– 34 (19 97) ; see als o Lib bey Glas s, Inc

. v. Onei da, Ltd

. , 197 F.R.D. 342, 347 (N.D. Ohio 1999 ) (“ Wh er e sever al par ti es, tho ugh re pre sen te d by sep ar at e cou nse l, ar e on the same s i de of a le gal dis put e and sha re inf ormati on for the ir m

utu al ben ef

it in tha t dis put e, the ‘

joi nt l i t i g a n t ’ pri vilege pro te ct s ‘a tt orn ey–cli ent pri vileged m at te rs when the y ar e sha re d wit h co- par ti es, even tho ugh tho se par ti es are re pre sen te d by sep ar at e cou nse l.’ ”) (e m pha si s added ) (ci ta ti on om it te d); In re Sandwi ch Isl ands Dis ti ll ing Corp

. , No. 07- 0102 9, 2009 WL 3055 199, at *2 (Ba nkr. D. Haw. Sept

. 21, 2009 ) (“ Under Hawai i la w, con tr ar y to fe der al comm on la w, the j oin t li ti gant comm on int er est pri vilege is li m it ed to co- par ti es and the ir cou nse l in pen din g li ti gatio n.”)

. Beca use the T exa s rul e has bot h a pen din g a c t i o n and a comm on int er est re qui re m ent , howe ver, t he “ al li ed l it igant ” do ct ri ne more acc ura te ly des cr ibe s ou r l aw.
See als o In re Tel egl obe Commc’ ns Corp

. , 493 F.3d 345, 364– 65 (3d Cir

. 2007 ) (“ [T ]o be el igibl e 12 for con ti nue d pro te ct ion , the comm uni cat ion m

ust be sha re d wit h the att orn ey of t h e me m ber of the
comm uni ty of int er est

. . . . T he at tor ney- sha ri ng re qui re m ent hel ps pre vent abu se by ens uri ng tha t the
comm on- int er est pri vilege onl y sup pla nts the dis cl o s u r e rul e when at tor neys, not cl ie nts , dec ide to sha re inf ormati on in ord er to coo rdi nat e le gal st ra te gies. ” (c it ation om it te d)) ; Unit ed Sta te s v. Sch wimmer , 892 F.2d 237, 243 (2d Cir

. 1989 )( “[ T he j oin t def ens e pri vilege] se r ve s t o pro te ct the con fi den ti al it y of
comm uni cat ion s pas si ng fr om one par ty to the att orn ey for anot her par ty w h e r e a j o int def ens e ef for t or s tr at egy has bee n dec ide d upon and unde rt aken by the par ti es and the ir re spe ct ive cou nse l.” )( empha s i s add ed)

. 9

### [j oint defe nse] doctrine app l i es wh ere parties are repr esente d by separ ate counsel but eng ag e in a

common leg al enter

prise.”)

. IV. XL has fai led to s h o w th a t th e com m uni cations between Strandw itz and Cintas are privileged.

XL arg ues that the communications betwee n Strandwitz and Cintas are p ro t ecte d by the
attorney –client privileg e, and more g ener ally , the in s u re r–insured rela tionship. We have not

rec og nized a gen era l insurer–insure d privileg e. Neve rtheless, we ag ree that, under cer tain 1 3


### circ umstances, communications betwee n an insurer and its insured may be shielded from discovery by the attorne y

–client privileg e. Tha

t appea rs to be the major ity

rule. See, e .g. , 17A L E E 

### R. R U S S

E T A L 

### ., C O U C H O N 

### I N S U R A N C E 

### § 250:19 (3d ed. 2005) (noting that majority view is t hat the

a tt o r n e y

– c li ent privileg e applies to communications betwee n an insured and its liability insurer whe n they conce rn a pote ntial suit and communica tions are pr edominantly intended to be tra

nsmitt ed to
the attorney hired by insurer to de fend insured). But for us to r eac h that conclusion here , XL must
show that its lawy er’ s communications are among those protec ted by Rule 503, and it has not done 1 4



### so.
A. Rule 503(b)(1)( C)’s allied litigant doctrine is inap plicabl e.

See , e.g. , In re Ford Mo tor Co. , 988 S.W .2d 714, 719 (T ex. 1998 ) (de c l i n i n g t o e x t end the 13 at tor ney–cl ie nt pri vilege to comm uni cat ion s bet ween an ins ure d and li abi li ty ins ure r wher e “at the ti m e [t he ins ure d] m ade her st at ements, the re was no att orn ey–cli ent re la ti ons hip ” betwe en her and her ins ure r) ; see als o In re Tex

. Farme rs Ins

. Exc h ., 990 S.W .2d 337, 341 (T ex. App.— T exa rkana 1999 , pet

. den ie d) (ho ldi ng tha t if cou nse l re ta ine d by an ins ure r act s as an “i n ve s t i ga t o r , ” and not as an at tor ney, the n the
comm uni cat ion s be twe en t he i nsu re d an d i nsu re r a re not pr ivil eged).
Our eviden ti ar y rul es have the for ce and ef fe ct of st at ute s and sho uld be con st rue d acc ord ingly. 14 See In re Cit

y of Geor get own , 53 S.W .3d 3 28, 3 32 ( T ex. 2001 ).
1 0

### Her e, XL is the client, and the communications wer e betwee n XL ’s lawy er and a third party ,

Cintas, who was not repr ese n t ed b y XL’s lawy er (or any other lawy er) and was not a party to the litigation o r an y o ther rela ted pending action. We rec og nize that Cintas, having contra cted for a
substantial deductible, may have share d a joint intere s t with XL during the administrative

proce eding s in the outcome of the c laim. But no matter how common XL ’s and Cintas’s inter ests might have been, our rule require s that the communication be made to a lawyer or her represe ntative

repr esenting another party in a pending action

. T E X



### . R. E V I D



### . 503 (b )( 1 )(C) (protec ting cer tain
communications “by

. . . the client’s lawy er
. . . t o a l aw y er o r a repr esenta tive of a lawy er
repr esenting another party in a pending action and conce rning a matter of common interest there in”).
Those re quirements we re not met he re.
Part of XL ’s difficulty in proving a privi l ege s t em s fr om the fac t that, in Texas, worke rs’

compensa tion claims are broug ht direc tly ag ainst a worke rs ’ compensation car rier, with limit ed
involvement o f t h e employ er in the adjudication of the rig hts to benef its. The insurer, not the employ er, is direc tly responsible for pay ing benef its. See T E X



### . L A B



### . C O D E 

### § 406.031(a) (making the
insurance car

rier and not the employ er directly “l i ab l e fo r compensa tion for an employ ee’ s injury
without reg ard to fault or neg lige nce” ). Thus, the insurer , not the insured, is the client a nd party 1 5

Under the ins ura nce pol ic y, X L is pri m ar il y re spo nsi ble for the paym ent of ben ef it s as wel l as le gal 15 fe es tha t a ri se out of

any cl ai m

or sui t i t d ef

end s, wh il e Ci nta s r ei m

bur ses it fo r s uch exp ens es:
I n con si der at ion of a re duc ed pre m ium, you have agree d to re imburse us up to the ded uct ibl e amounts st at ed in the Sche dul e at the end o f t h is end ors ement for al l paym ent s le gally
re qui re d, inc lud ing All oca te d Loss A d j u st m ent Expe nse (s ), wher e you have el ect ed to inc lud e suc h exp ens e as ind ic at ed in the Sche dul e, whic h ar is es out of any cl ai m or sui t we def end

.

1 1

### to the pending action, and it reta ins counsel on its own behalf

. I n contra st, in a lawsuit involving a
standard liabilit y insurance policy , only the insured is a party to the case, and the i nsurer ty pically

reta ins counsel on its insured’s behalf

. Often, as outlined below, those communications fall within 1 6



### one of Rule 503(b)’ s subsections. But in a case in which the communications wer e not made to the
insured’s lawy er, and the insured is not a party to a pending action, as require d by the rule, the allied litigant privileg e does not a pply

. B. XL and Cintas w ere not joint clients.
For simil ar rea sons, the joint client rule of privileg e is inapplicable. XL , and XL alone, was
Strandwitz’s client. XL does not arg ue, nor is there any evidenc e, that Strandwitz also repr esente d
Cintas. W e do not exclude the possibility that an insured a

nd insurer may

have a common lawy er
in the worke rs’ compensa tion context. “[W ]e have n ev er held that an insurance defe nse lawy er

cannot repr esent both the insurer and the insured, only that the lawy er must repr esent the insured and
protec t his interests from compromise by the insurer.” Unauthorized Practice of Law Comm. v. Am.

We wil l re m ai n re spo nsi ble for the ful l paym ent of al l cl ai m s unde r thi s pol ic y wit hout
re gard to your abi li ty or int ent ion to re imburse us for the ded uct ibl e amount, pro vided tha t thi s do es not re le ase you fr om your ob li gatio n t o r ei m

bur se us.
See , e.g. , Raymo nd v. N.C. Pol ic e Bene vol ent Ass ’n, Inc

. , 721 S.E.2d 923, 926 (N.C. 2011 ) (“ T he 16
m ost comm on sce nar io invol ving a tr ipa rt it e at tor ney–cl ie nt re la ti ons hip occ urs when an ins ura nce company employs cou nse l to def

end it s ins ure d a ga i n s t a cl ai m
. . . . I n the ins ura nce con te xt, cou rt s fi nd tha t the at tor ney def

end ing the ins ure d and re cei ving paym ent fr om the ins u r a n c e company re pre sen ts bot h the ins ure d and the ins ure r, pro vidin g j oin t r e p r ese nta ti on to bot h cl ie nts

. . . . Under the se ci rc um st anc es, not wit hst and ing tha t usu al ly onl y t he i n s u r ed has bee n sue d, a tr ipa rt it e at tor ney- cl ie nt re la ti ons hip exi st s bec aus e the int er est s of bot h the ins ure d and the ins ure r in pre vaili ng agains t the pla int if f’ s cl ai m ar e cl ose ly al igned.” (c it at ion s om it te d)) ; see als o Me tr ofl igh t, Inc

. v. Argo naut Ins

. Co. , 403 F. Supp

. 1195 , 1197 (N.D. T ex. 1975 ) (“ Lia bil it y ins ura nce pol ic ie s
. . . comm onl y obl igate the ins ure r to def end act ion s agains t the ins ure d wi thi n t he p oli cy covera ge.”).
1 2

### Home Assurance Co. , 261 S.W .3d 24, 42 (Tex. 2008) (empha sis in orig inal); see also id. (noting that

“[w]hether defe nse counsel also repr esents the insurer is a matter of contra ct betwee n them”); T E X



### . D I S C I P L I N A R Y 

### R

U L E S 

### P R O F 

### ’ L 

### C O N D U C T 

### R. 1.06 (allowing a lawy er to repr esent more than one client
in a matter if not prec luded by conflicts betwee n them) , reprinted in T E X



### . G O V 

### ’ T 

### C O D E 

### , tit. 2, subtit. G, app. A. We re co gn i z e that Texas law assumes that worke rs’ compensa tion insurers and employ ers will conve rse a bout worker s’ compensa tion claims. See T E X



### . L A B



### . C O D E 

### § 415.002(b) (providing that an insurance car rier does not commit an administrat i v e v i o l at ion by allowing an employ er to fre ely discuss a claim, assist in the investiga tion and evalua tion of a claim, or attend and participa te i n a d i v i sion proce eding ); T E X



### . A D M I N



### . C O D E 

### § 65.10 (same)

. But befor e those
communications are privileg ed, parties must show that the communications come within the ambit of Rule 503, and XL

has fa iled to make such a showing here

. Nor do we rule out the possibili ty that an insurer can be a repr esenta tive of the insured under
Rule 503, making some of its communications privileg ed. See Unauthorized Practice of Law , 261
S.W .3d at 43 (noting that “‘a n insurer’ s rig ht of control gen erally includes the authority to make
defe n s e d ec i s i o ns as if it were the client “whe re no conflict of interest exis ts”’” (empha sis in orig inal)(c itation omitted)); see also T E X



### . R. E V I D



### . 503(a) (2), 503(b)( 1)(A) ,(C),(D)

. But XL has neither ple aded nor

proved tha t this i s the ca se.
Both sides a

rg ue for cef

ully that sound policy

favor s their position. W hether rec og nizi ng a privileg e here is g ood policy is another matter; we conclude only that the communications here are
not within the allied liti g ant or joint client privileg es.

1 3

### C. The com m uni cations are not privileged und er sub sect ions (A), (B), (D), or (E).

XL also arg ues that the communications are privileg ed under Rule 50 3(b)( 1)(A) , which
protec ts communications “betwe en the client or a repr esenta tive of the client and the client’s lawy er

or a r epre sentative of the lawy er.” T E X



### . R. E V I D



### . 503(b)( 1)(A)

. Acc ording to XL , the insurer and
insured are “re prese ntatives” of eac h other. Texas Rule of Evidence 503(a) (2) define s
“re prese ntative of the c lient” as: (A) a person h av ing authority to obtain profe ssional leg al service s, or to act on advice there by

rende red, on be half of the client, or (B ) any other person who, for the purpose of eff ectua ting leg al repr esenta tion for the client, makes or rec eiv e s a c o nfidential communication while acting in the scope of employ ment for the c lient.

T E X



### . R. E V I D 

### . 503(a) (2).
Cintas could not have been a “re prese ntative of the client,” as it did not have the authority

to obtain leg al service s for its insurer, XL. Fo r t h e same rea son, Cintas could not act, on XL ’s
behalf , on any advice “ther eby rende red” —that is, rende red as a result of it having obtained counsel
for XL

. XL does not contend, nor is t h er e any proof, that Strandwitz repr esente d both XL and Cintas, so Cintas does not qualify as a “client,” either. Thus, neither subsections (A) nor (D) protec ts
the communications. See T E X



### . R. E V I D



### . 503(b)( 1)(D) (shielding communications “betwe en
repr esenta tives of the client or betwee n the client and a repr esenta tive of the client”)

. XL does not
contend that any other provision applies. Subsection B, w hich involves communications betwe en

1 4

### the lawy er and the lawy er’ s re p re s en t at ive, is inapposite, as is subsection E, which perta ins to 1 7 

### multipl e lawy ers r epre senting the same c lient. 1 8



### D. XL’s aff

idavit d oes not supp ort a privilege for com m uni cations to Cintas

. To support its privileg e claim, XL submitt ed the claims adjuster’ s aff idavit. Martinez stated that Cambridg e re tained Strandwitz on XL ’s beha lf and that Strandwitz would: [P ]rovide communication to Cambridge rela ting to their profe ssional service s, their opinions associate d with those profes s i onal service s and also provide information
nece ssary to the proper rendition o f t h o s e s ervices.

. . . [T] he rec ords are not disclosed to a

ny one who is not an employ ee of Cambridge , XL or in furthe ranc e of the provision of the prof

essional leg al servic es. (empha sis added)

. This aff idavit speaks onl y t o comm unications betwee n XL ’s law firm and its clients, not to c ommunications be tween XL ’s law firm and the employ er Cintas. Fur thermore , the
aff idavit does not purport to establish any privile ge extending to the communications betwee n
Strandwitz and Cintas. The trial court noted this and order ed production of only those documents. 1 9


### We conclude tha t the trial court a cted within its discretion.

See T E X

. R. E V I D

. 503( a) (4) (de fi nin g “r epr ese nta ti ve of the la wyer” as ei the r a la wyer’s employee 17
or an a cco unt ant ).

See id. R. 503( b)( 1)( E) (pr ote ct ing comm uni cat ion s “amon g l a w ye r s and the ir re pre sen ta ti ves 18
re pre sen ti ng the same cl ie nt” ).

Aft er re viewin g the doc um ent s in camera , the tr ia l cou rt st at ed tha t it had det er m ine d som e were 19 not pri vileged “mainl y be cau se the y ar e comm uni cat ion s wit h a K e l l i G r e en who is the re pre sen ta ti ve f or Cint as, whic h I bel ie ve was the employer.” T he cou rt con ti nue d: “And the y do not app ear to be doc um ent s as des cr ibe d by Ms

. Ma rt ine z in the af fi davit

. . . I thi nk the re is no eviden ce to sup por t tha t comm uni cat ion s wit h Ms

. Gre en fr om Cint as ar e pri vileged, and so I ’m going to ord er tho se pro duc ed but onl y tho se pro duc ed.”
1 5

### V. Conclusion

The a ttorney

–client privileg e shields otherw ise rele vant information fr om discovery

. As a result, we construe it narr owly to “enc ourag e full and fra nk communication betwee n attorney s and 2 0


### their clients and there by promote broade r public interests in th e o b s e r v a n ce of law and administration
of justice.” Upjohn Co. v. United States , 449 U.S. 383, 389 (1981). Whi l e XL asser ts that the

at t o rn ey –client privileg e protec ts communications betwee n an insurer and its insured, it has n o t broug ht the rele vant communications within Rule 503 ’ 

### s para meters. Be cause the documents are not
protec ted from di s co v er y u n d er the alli ed li tiga nt doctrine or any other part of R ule 503, we deny
relief . T E X



### . R. A P P



### . P. 52.8(a)

.

____________________________________ Wallace B . J eff

erson Chief J ustice

OP INION DELIVERED : J une 29, 2012

See Hyman v. Gr ant , 112 S.W . 104 2, 10 44 ( T ex. 1908 )( “As the ru le of pri vilege has a t end enc y 20 to pre vent the ful l dis cl osu re of the tr uth , it sho uld be li m it ed to cas es whic h ar e st ri ct ly wit hin the pri nci ple of the pol ic y that gav e i t b ir th. ”)

. 1 6