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An insurance company seeking to prevent disclosure of an internal memo by attorney-client privilege argued before the state Supreme Court Thursday in Pittsburgh that the principle provides a two-way street for confidential communications. In Nationwide Mutual Insurance Co. v. Fleming, Nationwide Mutual is asking the court to find that the Superior Court erred in ruling that attorney-client privilege protects from disclosure only information provided by a client to his lawyer. The Superior Court ruled in favor of a group of former Nationwide agents being sued by the company that a memorandum from the company’s office of general counsel to top executives could be discovered. “Allowing discovery of communication from attorneys to clients would have a profound chilling effect on that principle of justice,” said Nationwide attorney Burt Rublin of Ballard Spahr Andrews & Ingersoll in Philadelphia. In support of its argument that an attorney’s advice is privileged, Nationwide cited the court’s 1900 opinion in National Bank of West Grove v. Earle, in which the court wrote: “If it were not, then a man about to become involved in complicated business affairs, whereby he would incur grave responsibilities, should run away from a lawyer rather than consult him.” Robert O. Lampl, of Pittsburgh, argued that the court has revisited privilege many times since its decision in Earle. Furthermore, the decision is inapposite because it doesn’t deal directly with privilege, he said. “I think you can discard Earle as dicta,” Lampl said. “I don’t think it provides a true analysis.” Asked by Justice Max Baer whether there is any case that controls the issue, Lampl replied that the question appears to be one of first impression. Justices Debra M. Todd and Seamus P. McCaffery were members of the three-judge panel that decided the intermediate court appeal in Fleming. Both judges recused themselves, leaving four justices to hear the arguments Thursday. McCaffery authored the 20-page opinion in which Todd and Judge John T. Bender joined. In the underlying case, Nationwide sued a group of former insurance agents who allegedly provided confidential information on policyholders to competing carriers. The agents filed a counterclaim alleging bad faith and an effort to drive the agents out of business. Lampl represented the agents before the high court. During a bench trial before Butler County Common Pleas Judge Thomas J. Doerr, Nationwide presented testimony regarding its “reflex action plan,” which the agents asserted was an illegal plan to drive them out of business through harassment and baseless lawsuits. The agents filed a motion to compel production of an unredacted copy of exhibit 529 – identified in the subsequent appeals as Document 529. Butler County Common Pleas Judge S. Michael Yeager ruled Nationwide had waived privilege with respect to any documents regarding the “reflex action plan.” The Superior Court initially granted the agents’ motion to quash Nationwide’s appeal. On remand from the Supreme Court, the Superior Court affirmed the trial court’s result, but on different grounds, finding that the document is not privileged. During arguments before the high court, Justice Thomas G. Saylor asked Rublin why the document could not be considered privileged as attorney work product. Rublin replied that Nationwide has not asserted attorney work product privilege, but added that it could apply in addition to attorney-client privilege. Rublin argued that the trial court erred in finding that because Nationwide had introduced similar documents into evidence, it had waived privilege on the subject matter with regard to Document 529. Asked by Chief Justice Ronald D. Castille what the difference in subject matter between the documents is, Rublin replied that the memorandum was filed under seal and requested the court to review the document in camera. Lampl argued that the plain meaning of the attorney client privilege law, 42 Pa.C.S.A. Section 5928, limits the privilege to communications from the client to the attorney except in cases where communication from the attorney to the client would reveal prior communication from the client. Asked by Castille how the statute overcomes the precedent in Earle, Lampl replied that the case is inapposite. He added that the 108-year-old case has never before been cited in the way Nationwide cites it. Finally, Lampl argued that while Pennsylvania Rule of Civil Procedure 4004.3 protects the notes, memoranda, research and legal theories of an attorney, it provides an exception in a case of abuse of process. “The rule of civil procedure sets forth that these matters are clearly discoverable,” Lampl said. “Nowhere in that rule is there a bar on getting attorneys’ advice, memoranda or the like.” Read Legal contributors Ellen C. Brotman’s and Michael Hayes’ column about the future of attorney-client privilege in Pennsylvania.

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