X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Suppose that an in-house attorney works in an industry whose statutory and regulatory framework just changed. In response to a request, the attorney’s outside counsel analyzed how these legal changes may affect the company, her long-time client. Her memo gives the attorney her detailed legal advice about what would, and what would not, be legally permitted under this new regulatory scheme. After spending several years in the in-house attorney’s file drawer, the document is deemed responsive to a discovery request served on the company. The attorney-client privilege claim for this document could not be easier. It is the company’s outside counsel’s confidential legal advice to the company, the client. It was provided in response to an express request for the advice. If any document is privileged, this one is. Certainly, the company may withhold this document as privileged. Right? Unfortunately, the answer is a definite “maybe.” Although the attorney-client privilege generally is viewed as protecting confidential communications relating to legal advice running in both directions � from the client to the attorney and from the attorney to the client � not every court reads the law that way. Rather, starting from the premise that the attorney-client privilege exists to protect client confidences, some courts sustain privilege claims for communications from attorneys to their clients only if the attorney’s communication is based on or reveals confidential communications or facts from the client. Pa. court found attorney’s memo not to be privileged Nationwide Mutual Ins. Co. v. Fleming, 924 A.2d 1259 (Pa. Super. Ct. 2007), is a recent example of a court adopting the narrower, “one-way street” approach for attorney-to-client communications. The trial court found that, by producing two documents voluntarily, Nationwide waived its attorney-client privilege claim for a third document based on the “subject matter” waiver rule. The intermediate court found that, because neither of the two documents was privileged, there was no subject-matter waiver. But the court did not stop there; instead, it examined the privilege claim for the document at issue, a memorandum by an attorney in Nationwide’s general counsel’s office to 15 Nationwide employees. According to the Superior Court, the document discussed “on-going efforts to manage agent defections” and “outline[d], . . . in general terms, counsel’s opinion as to the likely outcome of current and pending litigation.” Id. at � 29. Applying Pennsylvania’s statutory attorney-client privilege and focusing on only the attorney-client privilege (i.e., not on the work-product protection), the Superior Court found that “[c]ommunications from counsel to a client may be protected . . . , but only to the extent that they reveal confidential communications previously made by the client to counsel for the purpose of obtaining legal advice.” Id. at � 27 (citations omitted) (italics in original). Because the document at issue “d[id] not disclose any confidential communications by . . . the client, to its counsel,” the court found the document not privileged. Pennsylvania’s Supreme Court has agreed to hear an appeal, Nationwide Mutual Ins. Co. v. Fleming, 935 A.2d 1270 (Pa. 2007), so the Superior Court’s decision may not be the last word. In Upjohn Co. v. U.S., 449 U.S. 383 (1981), the U.S. Supreme Court rejected limiting the privilege to a corporation’s “control group.” The court observed that “the privilege exists to protect . . . the giving of professional advice to those who can act on it” and noted that “if the purpose of the attorney-client privilege is to be served, the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected.” Id. at 390, 393. Further, Upjohn noted that the “privilege . . . protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney.” Id. at 395. Relying on Upjohn‘s focus on the need for certainty and for protecting “confidential communications,” many federal courts have found that, so long as they relate to legal advice, confidential attorney-to-client communications are protected. In re LTV Securities Litigation, 89 F.R.D. 595, 602 (N.D. Texas 1981), observed that a narrower rule “fails to deal with the reality that lifting the cover from the advice will seldom leave covered the client’s communication” and would “lead[] to uncertainty as to when the privilege will apply.” That court found that “[a] broader rule prevails in the federal courts; a rule that protects from forced disclosure any communication from an attorney to his client when made in the course of giving legal advice.” Id. (citations omitted); see Sprague v. Thorn Americas Inc., 129 F.3d 1355, 1370 (10th Cir. 1997) (surveying federal authorities). Many state courts also have adopted rules broadly protecting attorney-to-client communications. Spectrum Systems Int’l v. Chemical Bank, 581 N.E.2d 1055, 1060 (N.Y. 1991), found that “the privilege is not narrowly confined to the repetition of confidences that were supplied to the lawyer by the client.” The New York Court of Appeals characterized the narrower approach as a “cramped view of the attorney-client privilege [that] is at odds with the underlying policy of encouraging open communication; . . . poses inordinate practical difficulties in making surgical separations so as not to risk revealing client confidences; and . . . denies that an attorney can have any role in fact-gathering incident to the rendition of legal advice and services.” Id. (citations omitted) (italics in original); accord Sprague, 129 F.3d at 1370 (applying Kansas law). Similarly, Uniform Rule of Evidence 502(b) does not distinguish client-to-attorney from attorney-to-client communications. It protects any “confidential communication made for the purpose of facilitating the rendition of professional legal services to the client (i) between the client . . . and the client’s lawyer.” And comment i to � 69 of the Restatement (Third) of the Law Governing Lawyers (2000), adopts the “broader rule” because it is “more likely to assure full and frank communication” and “avoids difficult questions in determining whether a lawyer’s communication itself discloses a client communication.” But some courts still adhere to narrower rules. The D.C. Circuit has limited the privilege for attorney-to-client communications to those that ” ‘rest on confidential information obtained from the client.’ ” Tax Analysts v. IRS, 117 F.3d 607, 618 (D.C. Cir. 1997). And some state courts have protected only some attorney-to-client communications. See Loftis v. Amica Mut. Ins. Co., 175 F.R.D. 5, 9-10 (D. Conn. 1997) (predicting that Connecticut would adopt the narrower approach). Fleming and the decisions it cites interpreting Pennsylvania law illustrate the difficulties in applying the narrower rule. Those decisions reflect four, slightly different articulations of standards indicating when attorney-to-client communication are privileged, depending on whether the attorney’s communication is “based on” or “reveals” either “confidential communications” or “confidential facts.” Those decisions protect attorney-to-client communications if they: • Are based on a confidential communication from the client, Garvey v. Nat’l Grange Mut. Ins. Co., 167 F.R.D. 391, 395 (E.D. Pa. 1996) (“communication must at least be based upon confidential communications received from the client”). • Are based on a confidential fact learned from the client, Slusaw v. Hoffman, 861 A.2d 269, 273 (Pa. Super. Ct. 2004) (protecting “communications . . . based upon confidential facts that the client disclosed initially to the attorney”). • Reveal a confidential communication from the client, Coregis Ins. Co. v. Law Offices of Carole F. Kafrissen P.C., 186 F. Supp. 2d 567, 570 (E.D. Pa. 2002) (privilege applies when, “if disclosed, [the communication] would necessarily reveal the confidences . . . by the client”). Or: • Reveal a confidential fact disclosed by the client, Fleming, 924 A.2d at 1269 (document that “reveal[ed] no confidential facts communicated by [the client] to counsel” not privileged) (italics in original). Of course, differences between “based on” and “reveal,” as well as those between “confidential communications” and “confidential facts,” may be subtle. Indeed, they may appear trivial. Articulation of standard can determine outcome Nonetheless, the precise articulation of the standard can be outcome determinative. Take the example at the beginning of this article � an attorney’s analysis of how statutory and regulatory changes affect her client and what a new legal scheme permits and prohibits. This advice was “based on a confidential communication” in that the client requested the legal analysis in confidence. For that reason, the advice may be privileged under the first standard. On these bare-bones facts, however, the advice may not be privileged under the other three standards. An analysis of a new regulatory scheme may not be “based on” any “confidential facts” the attorney has learned from her client (although it also could be), so the memo may not pass muster for privilege purposes under the second standard. And, even if the memorandum was based on a “confidential communication” or “confidential fact,” it is not privileged under the third or fourth standards unless the attorney happens to have recited or otherwise “revealed,” respectively, the underlying “confidential communication” or “confidential fact.” Upjohn observed that “[a]n uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all.” 449 U.S. at 393. But, as reflected by Fleming, an uncertain privilege may be worse than no privilege at all if clients seek legal advice expecting that it will remain confidential, only to discover that their adversaries may use their lawyers’ advice against them. David Booth Alden is a litigation partner in Jones Day’s Cleveland office. He can be reached at [email protected]. The firm represents Nationwide Mutual Insurance Co., but did not represent the company in Nationwide Mutual Ins. Co. v. Fleming, a case discussed in this article.

This content has been archived. It is available exclusively through our partner LexisNexis®.

To view this content, please continue to Lexis Advance®.

Not a Lexis Advance® Subscriber? Subscribe Now

Why am I seeing this?

LexisNexis® is now the exclusive third party online distributor of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® customers will be able to access and use ALM's content by subscribing to the LexisNexis® services via Lexis Advance®. This includes content from the National Law Journal®, The American Lawyer®, Law Technology News®, The New York Law Journal® and Corporate Counsel®, as well as ALM's other newspapers, directories, legal treatises, published and unpublished court opinions, and other sources of legal information.

ALM's content plays a significant role in your work and research, and now through this alliance LexisNexis® will bring you access to an even more comprehensive collection of legal content.

For questions call 1-877-256-2472 or contact us at [email protected]

 
 

ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2020 ALM Media Properties, LLC. All Rights Reserved.