SVB Financial Trust v. Federal Deposit Insurance Corporation

Background

The Federal Deposit Insurance Corporation, acting as receiver for Silicon Valley Bank, asked the court to overrule SVB Financial Trust’s objections to the FDIC’s access to 47 documents. SVB Financial Trust claimed that the documents were protected by attorney-client privilege. The court received the documents for private review and heard argument on June 24, 2025.

The opinion states that Silicon Valley Bank was the principal subsidiary of SVB Financial Group and that the two entities had completely overlapping boards of directors. Their boards operated through joint committees. The Bank and SVB Financial Group also used the same outside law firm, Sullivan & Cromwell LLP, and the same in-house counsel. The parties disagreed about whether SVB Financial Group had an exclusive attorney-client relationship with those lawyers for some matters.

Legal standard

The court applied California law to attorney-client privilege. Under California Evidence Code sections 950 and 954, a client may refuse to disclose, or prevent another person from disclosing, a confidential communication between the client and lawyer.

California Evidence Code section 962 addresses clients who jointly retain or consult the same lawyer about a matter of common interest. It provides that one joint client, or that client’s successor, may not claim privilege over a communication made during that joint representation when the communication is used in a civil proceeding between the joint clients or their successors. The court explained that communications between jointly represented clients remain privileged against outsiders, but the joint clients generally cannot use the privilege against each other.

SVB Financial Trust, as the party asserting an exclusive privilege, had the burden to show that the privilege existed and applied to the disputed documents.

Court’s analysis

The court rejected SVB Financial Trust’s argument that the joint-client exception applies only to communications concerning a specific matter of shared legal interest. The court read section 962 to make all communications made during the joint attorney-client relationship discoverable between the joint clients, without limiting the exception to communications within a particular subject matter or fee agreement.

The court also found that SVB Financial Trust had not proved that SVB Financial Group had an exclusive attorney-client relationship with Sullivan & Cromwell or the in-house counsel for any matter during the period when the Bank and SVB Financial Group were jointly represented. SVB Financial Trust submitted no declaration, engagement agreement, lawyer or client testimony, or other evidence establishing such a relationship or defining its scope.

The court examined the 47 documents privately but was not persuaded that references to standards, practices, or regulations of the Federal Loan Bank system necessarily showed that the communications concerned a matter unique to SVB Financial Group rather than the Bank. The court noted that the two institutions faced similar or overlapping regulatory requirements and were subject to a joint regulatory examination. The documents themselves did not show an express, separate attorney-client relationship.

Disposition

The court held that SVB Financial Trust had not met its burden to establish an exclusive privilege. It therefore ruled that SVB Financial Trust was not entitled to assert an exclusive privilege over the 47 disputed documents against the FDIC and granted the FDIC’s motion.