New Hampshire Narrows Crime-Fraud Exception to Intended Fraud and Confirms Common-Interest Privilege Requires Pending Litigation

New Hampshire Narrows Crime-Fraud Exception to Intended Fraud and Confirms Common-Interest Privilege Requires Pending Litigation

Introduction

In Atl. Anesthesia, P.A. v. Lehrer, 2025 N.H. 42, the Supreme Court of New Hampshire issued a major opinion at the intersection of privilege law and commercial disputes over physician practice transitions. The case arises from a contractual and employment conflict among Atlantic Anesthesia, P.A. and North American Partners in Anesthesia (New Hampshire) LLP (collectively, Atlantic/NAPA-NH), Wentworth-Douglass Hospital (WDH), and three anesthesiologists, Drs. Ira Lehrer, Nathan Jorgensen, and George Kenton Allen.

As WDH considered nonrenewal of its anesthesia services contract with Atlantic/NAPA-NH, the physician defendants retained counsel, WDH engaged its own counsel, and the parties explored a contemplated transition under which the physicians would become WDH employees. Litigation ensued, and with it aggressive discovery battles over privilege. The Superior Court compelled disclosure of certain communications under both the crime-fraud exception and a “compelling need” theory, limited the common-interest doctrine to a particular date, and authorized depositions of counsel. On interlocutory appeal, the Supreme Court clarified three core issues:

  • Rule 502(b)(3)’s common-interest protection applies only when there is a “pending action,” and does not extend to pre-litigation communications;
  • The crime-fraud exception in Rule 502(d)(1) is limited to intended “crime or fraud” in its ordinary legal sense, not broader torts such as breach of fiduciary duty or tortious interference, and turns on whether the client sought to use counsel to perpetrate a fraud;
  • The orders compelling depositions of counsel and disclosing portions of attorney-client emails based on “necessity” were vacated and remanded for further proceedings.

Summary of the Opinion

The New Hampshire Supreme Court affirmed in part, reversed in part, and vacated in part:

  • Common-Interest Doctrine: Affirmed that under N.H. R. Ev. 502(b)(3), the common-interest doctrine attaches only once litigation is “pending.” The Court accepted, without deciding, the trial court’s determination that litigation was pending as of June 27, 2019 (the date Atlantic/NAPA-NH notified WDH it would enforce restrictive covenants).
  • Crime-Fraud Exception: Reversed the trial court’s application of the crime-fraud exception to claims of breach of fiduciary duty and tortious interference. The Court held that the exception turns on whether the client’s aim was to use counsel to perpetrate a “fraud” (as legally defined, i.e., a misrepresentation with intent and reliance), irrespective of the pleadings, and that the record did not support such a finding here.
  • Depositions of Counsel: Vacated the order compelling depositions of Attorneys Best and Mulholland because it rested on the now-rejected application of the crime-fraud exception; remanded for reconsideration consistent with the opinion.
  • “Compelling Need”/Necessity: Vacated the order requiring disclosure of certain factual content in attorney-client emails under a “compelling need” theory and remanded for full litigation of those issues in the trial court.

Factual and Procedural Background (Condensed)

Atlantic (a physician group) provided anesthesiology services at WDH under an exclusive contract set to expire November 30, 2019. Physicians Lehrer and Jorgensen had sold their ownership in Atlantic to NAPA-NH in 2014 and became employees; Allen joined in 2016. Their contracts included noncompete and nonsolicitation provisions. In late 2018, WDH signaled it might not renew the anesthesia contract. By February 2019, the physician defendants retained Attorney Robert Best. WDH retained Attorney Daniel Mulholland.

On May 2, 2019, WDH and the physician defendants executed a “common interest” agreement concerning “exploring potential future relationships,” and met (with counsel) on May 6 and May 20. WDH issued a nonrenewal notice May 22, briefly offered an extension, then rescinded it. On June 27, 2019, Atlantic/NAPA-NH notified WDH of its intent to enforce restrictive covenants. Litigation commenced in July 2019, and by late summer most providers resigned to join WDH; contracts were signed by mid-October (Lehrer on November 4).

Discovery fights followed. The Superior Court:

  • Initially found a prima facie showing for in camera review under the crime-fraud exception and ordered broad privilege submissions;
  • Later ruled the common-interest doctrine did not apply before June 27, 2019, applied the crime-fraud exception (limited to certain communications through November 4, 2019), and ordered depositions of counsel;
  • On reconsideration, compelled disclosure of portions of certain attorney-client emails based on “compelling need.”

Analysis

Precedents Cited and Their Influence

  • N.H. R. Ev. 502 and Petition of Stompor, 165 N.H. 735 (2013): Rule 502 codifies attorney-client privilege; the Court interprets evidence rules de novo based on plain language. This textual approach controls the common-interest ruling.
  • State v. Paul, 176 N.H. 262 (2023): Emphasizes plain meaning and the Court’s unwillingness to add words to rules. This anchors the decision limiting the common-interest doctrine to “pending action” communications.
  • N.H. R. Ev. 502(b)(3): Codifies a narrow common-interest privilege requiring communications to be “to a lawyer . . . representing another party in a pending action” and “concerning a matter of common interest therein.” The Court enforces these textual prerequisites.
  • N.H. R. Ev. 502(d)(1); United States v. Zolin, 491 U.S. 554 (1989): The crime-fraud exception removes privilege when counsel is sought to facilitate future crime or fraud—not to discuss past conduct. The Court hews to this orthodox limit and rejects expansion to all torts.
  • Milroy v. Hanson, 902 F. Supp. 1029 (D. Neb. 1995): Persuasively reads the federal analog to limit the exception to “crime or fraud,” not “crime or tort.” This aligns with the New Hampshire Court’s textual interpretation.
  • Jay Edwards, Inc. v. Baker, 130 N.H. 41 (1987) and Snierson v. Scruton, 145 N.H. 73 (2000): Define “fraud” under New Hampshire law as a misrepresentation made knowingly or with conscious indifference, intended to induce reliance, with justifiable reliance and resulting detriment. These elements shape the Court’s test for the crime-fraud exception.
  • McCabe v. Arcidy, 138 N.H. 20 (1993); F.D.I.C. v. Ogden Corp., 202 F.3d 454 (1st Cir. 2000): The party asserting privilege bears the burden to establish it; the party invoking an exception bears the burden to overcome it. The Court applies this allocation.
  • Cavallaro v. United States, 284 F.3d 236 (1st Cir. 2002) and Wigmore, Evidence § 2311: Explain the common-interest doctrine as an exception to waiver by disclosure to third parties. The opinion recognizes the doctrine but enforces New Hampshire’s narrower, codified scope.
  • Shelton v. American Motors Corp., 805 F.2d 1323 (8th Cir. 1986): The trial court applied Shelton’s strict standard for deposing counsel. Although not disapproved, the Supreme Court vacates the deposition orders because the underlying privilege rulings changed.
  • McGranahan v. Dahar, 119 N.H. 758 (1979); Desclos v. S. N.H. Med. Ctr., 153 N.H. 607 (2006): Discuss “compelling need” in other privilege contexts (especially psychotherapist-patient). The Court vacates the attorney-client “necessity” ruling and remands, noting this is an unsettled area in New Hampshire.
  • Medical Laboratory Management v. American Broadcasting Co., 30 F. Supp. 2d 1182 (D. Ariz. 1998), aff’d, 306 F.3d 806 (9th Cir. 2002): Counsel’s involvement to ensure compliance with law does not trigger the crime-fraud exception—used here to characterize the meetings as legal compliance-oriented rather than fraud-facilitating.
  • RSA 329:31-a (2017): Since 2016, physician noncompete covenants are unenforceable. This statutory environment supports the inference that counsel were engaged to navigate a complex legal framework, not to perpetrate fraud.

Legal Reasoning

1) Common-Interest Doctrine Requires a Pending Action

The Court’s analysis begins with the text of Rule 502(b)(3): communications are privileged when made to a lawyer (or representative) representing another party “in a pending action” and concerning a common interest therein. The Court rejects invitations to broaden the doctrine to pre-litigation or merely “anticipated” litigation communications (as some federal and sister-state decisions have done). Because the rule uses the phrase “pending action,” the Court enforces that limitation. The parties did not challenge the trial court’s selection of June 27, 2019, as the date litigation became pending, and the Supreme Court assumes that date without deciding it.

Practical upshot: Common-interest protection in New Hampshire is narrower than in jurisdictions adopting a broader “anticipated litigation” standard. Communications prior to the onset of a “pending action” are not sheltered by 502(b)(3), even if a written common-interest agreement exists.

2) Crime-Fraud Exception: Limited to Intended Fraud, Not General Torts

The crime-fraud exception, Rule 502(d)(1), strips privilege only if the services of the lawyer were sought to enable or aid future “crime or fraud.” The Court gives “fraud” its ordinary legal meaning under New Hampshire law—intentional misrepresentation with the intent to induce reliance, and actual, justifiable reliance causing detriment. It declines to expand the exception to intentional torts generally (e.g., breach of fiduciary duty or tortious interference), emphasizing both the rule’s text and the systemic concern not to chill clients from candidly seeking lawful guidance (referencing Rule of Professional Conduct 1.2(d)).

Rather than answer the certified question categorically, the Court reframes the test: the “critical question” is whether the client’s aim was to use the attorney to perpetrate a fraud—i.e., to assist in making a false representation intended to be relied upon to the opponent’s detriment—regardless of whether the complaint includes a fraud count. Thus, what matters is intent to commit legal “fraud,” not the labels in the pleadings.

Applying this standard, the Court holds the record does not support the exception:

  • As to WDH: Atlantic/NAPA-NH did not allege or show that WDH intended to use Attorney Mulholland to assist WDH in making an intentional misrepresentation upon which Atlantic/NAPA-NH would rely. The tortious interference claim, standing alone, is insufficient.
  • As to the physicians: Evidence that they may have used lawyers while acting contrary to their employer’s interests (e.g., by omission) does not establish an intent to make a knowingly false statement to induce reliance by Atlantic/NAPA-NH. The Court notes the context of lawful advice-seeking in a complex regulatory environment (including the statute rendering physician noncompetes unenforceable) and finds no reasonable basis to conclude the attorneys’ services were sought to perpetrate a fraud.

3) Burdens of Proof

The party invoking the attorney-client privilege bears the initial burden to establish it. Once established, the party seeking disclosure carries the burden to demonstrate an exception (e.g., crime-fraud) applies. The Court’s application of this framework leads it to reverse the trial court’s crime-fraud ruling because Atlantic/NAPA-NH did not meet its exception burden under the clarified standard.

4) Depositions of Counsel

The trial court applied the Shelton test to compel depositions of counsel, premised on its conclusion that many communications were non-privileged under the crime-fraud exception. Because the Supreme Court rejects that privilege ruling, it vacates the deposition orders and remands. The Court does not decide broader issues about deposing counsel (including under Superior Court Rule 36(d)(5)(i)) on this record.

5) “Compelling Need”/Necessity Theory for Piercing Attorney-Client Privilege

The Superior Court, invoking McGranahan and borrowing from the psychotherapist-patient privilege framework in Desclos, pierced attorney-client privilege for portions of certain emails, finding Atlantic/NAPA-NH had an “essential need” for the physicians’ best contemporaneous factual recollections embedded in communications to counsel. The Supreme Court vacates this ruling without deciding whether a “necessity” doctrine applies to the attorney-client privilege in civil cases, citing insufficient development of the issue and remanding for full briefing and analysis.

Impact

Immediate Effects on the Parties

  • Pre–June 27, 2019 communications between WDH and the physicians (or their counsel) are not protected by the common-interest doctrine simply because the parties signed a “common interest agreement.” The rule requires a pending action.
  • Communications through November 4, 2019 are not stripped of privilege under the crime-fraud exception absent evidence that they were intended to facilitate a fraudulent misrepresentation. As a result, many communications the trial court ordered disclosed are now likely protected, subject to any remaining privilege challenges.
  • Attorney depositions and the email “necessity” disclosures must be reconsidered on remand with the clarified privilege landscape.

Broader Precedential Significance in New Hampshire

  • Common-Interest Narrowing: New Hampshire’s codified common-interest rule is narrower than jurisdictions recognizing a pre-litigation “allied lawyer” or “anticipated litigation” version. Organizations operating in multi-state matters must tailor their privilege strategies accordingly.
  • Crime-Fraud Exception Clarified: Litigants cannot invoke crime-fraud merely by alleging non-fraud torts or fiduciary breaches undertaken while consulting counsel. They must show a reasonable basis that counsel was sought to perpetrate an intended fraudulent misrepresentation, including the elements of intent and reliance.
  • Privilege Strategy in Transactions: For parties coordinating on sensitive transitions (e.g., hospitals and physicians considering employment changes), counsel should recognize that:
    • Pre-litigation multi-client communications are vulnerable unless independently privileged (e.g., within a single client’s attorney-client relationship) or fit another recognized protection; and
    • Where communications must occur across separate entities before litigation is pending, consider structuring them through each side’s counsel with careful attention to confidentiality—but understand that in New Hampshire the 502(b)(3) shield will not attach absent a pending action.
  • Depositions of Counsel: While Shelton remains a demanding standard, New Hampshire’s opinion underscores that deposition orders predicated on a misapplied crime-fraud theory will not stand. Parties must first resolve privilege questions before compelling counsel testimony.
  • Unsettled “Necessity” Doctrine: Whether a “compelling need” exception can pierce attorney-client privilege in civil cases remains an open question in New Hampshire. Trial courts should require fulsome briefing and proceed cautiously given the centrality of privilege to the adversary system.

Complex Concepts Simplified

  • Attorney-Client Privilege (N.H. R. Evid. 502): Protects confidential communications between a lawyer and client made for obtaining legal advice. The client generally controls the privilege.
  • Common-Interest Doctrine (502(b)(3)): A limited exception to waiver when separate clients and their lawyers share privileged information to pursue a common legal interest. In New Hampshire, it applies only when a lawsuit is already pending and the communications are between or to lawyers representing different parties in that pending case about a shared interest in that case.
  • Crime-Fraud Exception (502(d)(1)): Removes privilege if a client consults a lawyer to help commit a future crime or fraud. “Fraud” means a legally recognized misrepresentation intended to cause reliance and resulting harm.
  • In Camera Review: A judge’s private review of documents or communications to decide privilege issues without disclosing them publicly or to the opposing party.
  • Breach of Fiduciary Duty: A tort alleging a trusted party (e.g., an employee with fiduciary duties) acted contrary to the beneficiary’s interests. Not all fiduciary breaches involve “fraud” as the law defines it.
  • Tortious Interference: Wrongful interference with another’s contractual or business relations. Again, not necessarily “fraud.”
  • Depositions of Counsel (Shelton test): Courts generally disfavor deposing opposing counsel. The party seeking such a deposition must show no other way to obtain the information, that the information is relevant and non-privileged, and that it is crucial to the case.
  • “Compelling Need”/Necessity: In some contexts (e.g., psychotherapist-patient privilege), courts may allow disclosure upon a strong showing of necessity. Whether this exists for attorney-client privilege in New Hampshire civil litigation is unresolved.

Conclusion

Atl. Anesthesia, P.A. v. Lehrer decisively refines New Hampshire privilege doctrine. First, it enforces the narrow, codified scope of the common-interest doctrine: no “pending action,” no common-interest shield. Second, it restricts the crime-fraud exception to its textual bounds, making “intended fraud” the touchstone and foreclosing attempts to pierce privilege based on generalized allegations of tortious conduct or fiduciary breaches absent a reasonable basis to find the client sought legal assistance to perpetrate a misrepresentation.

The opinion also signals caution in two developing areas—depositions of counsel and the proposed “necessity” exception to attorney-client privilege—vacating the trial court’s orders and remanding for fuller development. Collectively, the decision promotes predictability in privilege law, safeguards candid lawyer-client communications, and provides clear guidance to institutions and professionals navigating complex transitions: privilege is robust, but not elastic; its exceptions are real, but narrowly drawn and rigorously proven.

Case Details

Year: 2025
Court: Supreme Court of New Hampshire

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