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Hedge funds are known for their pack mentality, but questions remain about when they are legally acting in concert.

By Securities and Exchange Commission rules, all it takes for investors to be deemed a "group" is to act together for purpose of acquiring, holding or disposing of shares. But the law is murky enough that hedge funds aren't even sure if they can talk to each other at all anymore.

That's why Carl Icahn, who is in a proxy fight to get board seats at Amylin Pharmaceuticals Inc. (AMLN), publicly asked Amylin whether he is allowed to talk one-on-one with fellow activist investor Eastbourne Capital Management without the two of them being considered a "group," which would trigger Amylin's poison pill. Together, Icahn and Eastbourne own more than 21% of Amylin's shares.

At stake is the ease with which activist investors can communicate with each other without triggering the need to file disclosures - or, in the case of Amylin, triggering anti-takeover provisions at their companies of interest.

Technically, the precedent for groups was set last year in the case of railroad company CSX Corp. (CSX), when a federal district court said two hedge-fund companies, Children's Investment Fund Management LLP and 3G Capital Partners, formed a group months before actually filing as one, violating the SEC's Section 13(d). According to the ruling, the two companies "knew full well, or recklessly disregarded the substantial likelihood, that they had formed a group."

The court interpreted Section 13(d) to mean that Children's Investment Fund and 3G had formed a group in February 2007, rather than the December 2007 date admitted by the two firms. As evidence, it cited a preexisting relationship, previous exchanges of views with each other, and "striking patterns of share purchases." The court's interpretation of the SEC rules is seen as a precedent for what makes a "group," but investors themselves are going a step further.

Icahn and Eastbourne, as an example, have no obvious long-standing relationship, and haven't admitted to communicating with one another except in three-way conversations with Amylin. Perhaps more importantly, their share-buying habits show few similarities. Eastbourne has been in the stock since 2005, while Icahn started buying just last year. And during the third quarter of 2008, Icahn was adding to his Amylin stake as Eastbourne was subtracting.

Despite these differences from the CSX case, Icahn and Eastbourne are being extremely careful about not being legally considered a group.

In a note to its private clients regarding Amylin, corporate governance firm RiskMetrics Group said Icahn and Eastbourne appear "understandably wary" of communicating, in fear of Amylin claiming the pill has been triggered.

Amylin didn't respond directly to Icahn's public request to talk with Eastbourne last week, instead reiterating that it welcomed continued three-way discussions among the parties. That response shows it isn't just the hedge funds that are being conservative about interpreting the CSX case, but also the companies themselves. Notably, companies opposed to activist investors would want the widest interpretation possible of the CSX case.

RiskMetrics said in its note to clients, "As we found out in the CSX case last year, a determination of group formation is highly fact specific and a wild card that is difficult to predict."

-By Joseph Checkler, Dow Jones Newswires; 201-938-4297; joseph.checkler@dowjones.com