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Supreme Court Clarifies Attorney Work Product and Client Privilege Doctrines
The attorney-client privilege and attorney work-product doctrine got a fresh look recently from the Pennsylvania Supreme Court. Thanks in part to the efforts of PCCJR, which submitted an amici curiae Brief, the Court provided greater clarity on the path businesses in the Commonwealth should follow to maintain protection from discovery of their communications and other materials.
In BouSamra v. Excela Health, 2019 Pa. LEXIS 3277 (decided June 18, 2019), Pennsylvania’s highest court developed a new analysis for assessing whether a party has waived the attorney work-product doctrine, and explained the circumstances under which the attorney-client privilege may be preserved when communications include someone other than the lawyer and client.
In this case, Excela Health conducted an internal investigation based on suspected cases of patients who received cardiac stents, which may have been medically unnecessary. As part of the process, Excela hired a public relations firm (Jarrad) to assist in managing the message. Excela also hired outside counsel, who sent an e-mail to Excela’s General Counsel (Fedele) providing legal advice on the matter. In turn, Fedele forwarded outside counsel’s e-mail to a principal at Jarrad, who circulated the communication among Jarrad’s personnel working on the matter.
Ultimately, Excela made a public announcement regarding the results of the investigation indicating that patients of Cardiologist George BouSamra, M.D. and another physician had undergone medically unnecessary stent procedures. Dr. BouSamra sued Excela for defamation. During discovery, Dr. BouSamra sought, among other items, the e-mail authored by Excela’s outside counsel. The discovery dispute made its way to the Pennsylvania Supreme Court.
In its Opinion, the Court first explained that because the attorney work-product doctrine and attorney-client privilege have different purposes, the waiver analysis differs. The former protects the mental impressions and processes of an attorney, and the protection belongs to the attorney. The latter protects confidentiality of a client’s communications with the attorney, and the privilege is held by the client.
Attorney Work Product
Addressing the attorney work-product doctrine, the Court noted that disclosure of work product is based on Pa. Rule 4003.3, which permits discovery “… of any matter discoverable under Rule 4003.1 even though prepared in anticipation of litigation or trial by or for another party … The discovery shall not include disclosure of the mental impressions of a party’s attorney or his or her conclusions, opinions, memoranda, notes or summaries, legal research or legal theories…”
The Court adopted a new analysis to determine if waiver has occurred: If work product is shared with an adversary or is disclosed in a manner which significantly increases the likelihood that an adversary or anticipated adversary will obtain it, waiver has occurred. Further, the Court noted that work product need not be prepared in anticipation of litigation. Indeed, work product could include materials prepared without litigation in mind. The Court reasoned that the phrase in Rule 4003.3 “even though prepared in anticipation of litigation” is one of inclusion – not exclusion. (In a concurring Opinion, Justice Donohue took the opposite position.)
The Court then explained that the analysis is a fact-specific evaluation to be conducted by the trial court, which should consider whether “a reasonable basis exists for the disclosing party to believe ‘that the recipient would keep the disclosed materials confidential.’” As such, the case was remanded for evaluation by the trial court as to whether waiver occurred.
Turning to the attorney-client privilege, the Court ruled that disclosure of outside counsel’s e-mail to a third party – the PR firm – waived the privilege held by Excela. However, the Court addressed circumstances in which communications with a third party may not constitute a waiver. The Court indicated that the privilege may remain intact in cases in which disclosure is made to an individual with expertise upon which the lawyer relies, and is “indispensable to the lawyer giving legal advice or facilitated the lawyer’s ability to give legal advice to the client.”
In BouSamra, the Court rejected the argument that the PR firm was such a qualifying third party. Significantly, the PR firm was not hired by outside counsel to provide advice as part of the legal analysis, and no one at the PR firm weighed in before outside counsel provided Excela the legal advice.
Importantly, the Court did not shut the door on maintaining the attorney-client privilege if a third party is included in communications. Examples included a CPA helping a lawyer understand tax information, and an accident reconstruction expert assisting to evaluate liability. However, the Court did not expressly exclude the possibility that a PR firm could qualify as one whose insight or opinion is indispensable to the lawyer giving legal advice.
So, what does the BouSamra Opinion mean for businesses attempting to protect materials from disclosure?
Clearly, the scope of what qualifies as attorney work product has been expanded. It does not apply only to materials prepared when litigation is anticipated. It could be a variety of materials that contain an attorney’s mental impressions, conclusions or opinions. Proactive advisories, risk-benefit analyses and other legal opinions would arguably all be covered, regardless of whether litigation is on the horizon.
Also, it is clear that these materials could be disclosed to others aside from the lawyer’s client. Sub-contractors and business affiliates or partners could be entrusted with the materials. However, businesses should be very careful before disclosing the information to another person or entity. Someday a trial court could be evaluating whether “a reasonable basis” existed for you to believe the recipient would keep the disclosed materials confidential.
Exchanging information subject to a non-disclosure or confidentiality agreement would be indicia of that belief. Providing the information for viewing on-site only with no paper or electronic exchange would also tend to demonstrate your intent not to disseminate the information beyond the “friendly” recipient. Notwithstanding the Court’s new analysis, the principle remains that disseminating attorney work product should be done cautiously and sparingly.
Regarding attorney-client communications, businesses should remain guarded in what they disclose and vigilant in maintaining confidentiality. While there may be some leeway in arguing that disclosure of attorney-client communications was necessary to the legal evaluation process, Pennsylvania Courts remain reluctant to prevent discovery of information that has gone outside the “magic circle” surrounding the attorney and client.
Good reminder noted in a column by Darren McKinney published in the Wall Street Journal:
“Studies by the Mayo Clinic and others eventually convinced judges there was no causal link between silicone breast implants and the medical conditions the plaintiffs allegedly suffered. By 2010 the American Medical Association had concluded it was the “hysteria and hype” surrounding implant litigation that initially prompted judges and juries to overlook “an astonishing lack of scientific evidence, while plaintiffs and their attorneys raked in millions.””
In the News:
Opinion| Keep Lehigh County and Pennsylvania keystones of manufacturing, not lawsuits| Morning Call (paywall may apply)