X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.
The lawyer for an anonymous tipster whose revelation sparked a multimillion-dollar suit must reveal his client’s name if that suit is to proceed, the Georgia Supreme Court has ruled. “I don’t view it as a hardship, a defeat, or anything,” says Irwin W. Stolz Jr. of Atlanta’s Gambrell & Stolz. He represents both the corporate plaintiff in the case and the tipster. “If the question is ‘Would I take this case on again if it would come up tomorrow?’ the answer is an emphatic ‘Yes.’” But for lawyers who represent confidential informants, this case holds a valuable lesson: While attorney-client communications may be privileged, a client’s identity isn’t. This can be a problem for clients who hope to remain anonymous while providing information that is central to a civil case. And, in hindsight, Stolz admits he might have handled things differently. He says it’s highly unlikely the court would have ordered him to reveal his client had he not been representing the plaintiff too. “I would have suggested that the corporation get other counsel,” he says. “And I think that’s probably a mistake I made.” William W. Maycock of Atlanta’s Smith, Gambrell & Russell represents the defendant, Louisiana Forum Corp. He says he doesn’t comment on pending litigation. LONG-LOST $2M DEBT The case began in 1998 when Tenet Heathcare Corp. sued Louisiana Forum in Fulton County Superior Court. Tenet, which operates four Georgia hospitals, as well as hospitals in 16 other states, claimed Louisiana hadn’t paid a $2 million promissory note. The note was held originally by American Medical International Inc., which Tenet later acquired. The promissory note was essentially overlooked in the acquisition. Tenet didn’t learn about the note’s existence until an anonymous source tipped the company. That source — who’s still anonymous — walked into Stolz’s office in 1998 and told the lawyer he had information about the outstanding promissory note. With the note and accrued interest plus a provision for the recovery of lawyer’s fees should the note be litigated, that information was potentially worth millions. The source told Stolz to pass along the information to Tenet, if the company would pay him a portion of the money it recovered from Louisiana. TEXAS POW-WOW A hearing transcript shows Stolz phoned Scott Brown, general counsel to Tenet. Stolz told Brown his client had information that could prove very valuable to Tenet. Stolz assured Brown that he wasn’t a fly-by-night lawyer playing games. If Brown called around to his friends in Atlanta, he’d learn Stolz was a reputable attorney, Stolz told him. Stolz is a former Court of Appeals judge. Stolz and Brown arranged to meet in Texas days later. There they hammered out and signed an agreement that would give the tipster one-third of any money Tenet would recover from Louisiana. Brown wasn’t told the tipster’s identity. Stolz, it was agreed, would represent Tenet in its Georgia suit against Louisiana. Using information provided by the tipster, Stolz drafted and filed a complaint that sought about $4 million in damages. The case was under way. IDENTITY BATTLE ENSUES Louisiana wanted to know who had informed Tenet. Was it a disgruntled former employee, or perhaps somone who still worked for the company? Stolz says he has refused to reveal the source because the person had requested anonymity. “That was something the source asked us to honor and something we tried our very best to honor up to this point,” Stolz says. In discovery Louisiana demanded Tenet reveal the tipster’s identity. Stolz –representing the tipster and Tenet — refused. He cited the attorney-client privilege and his duty to keep client secrets. “Who tattled, if anyone, is irrelevant to the question of whether the debt is owed,” Stolz argued in response to Louisiana’s motion to compel discovery. But after a hearing, Superior Court Judge Constance C. Russell ruled it was fundamentally unfair for Louisiana to defend the suit unless the tipster was revealed. Tenet and its counsel would have to divulge the tipster’s identity in 10 days, or Russell would strike Tenet’s complaint. “Defendants are forced to defend an action without the ability to obtain discovery from the primary source of the allegations. On the other hand, plaintiff and the source are allowed to reap the benefits of their relationship, while shielding each other from the obligation to disclose discoverable information,” Russell stated in her order. Russell also issued a certificate of immediate review and relieved Tenet and Stolz of their obligations to comply with her order until the issue was resolved on appeal. The Court of Appeals denied Tenet’s application for review but the Georgia Supreme Court granted certiorari to the Court of Appeals. The court wanted the parties to address whether Russell erred by compelling Tenet and Stolz to disclose the identity of the tipster. The court also was concerned with whether Russell erred by providing for automatic dismissal of the case should Tenet and Stolz disregard her order compelling discovery. RULING: LAWYER MUST REVEAL CLIENT In its ruling the court addressed the attorney-client privilege and the lawyer’s duty to keep client secrets, two separate obligations under Georgia law. The court explained the rule making attorney-client communications privileged from disclosure “does not ordinarily apply where the inquiry is confined to the fact of the attorney’s employment and the name of the person employing him.” Tenet Heathcare Corp. v. Louisiana Forum Corp., No. S00A0759, Sup. Ct. Ga. (Dec’d. Nov. 13, 2000). “Every litigant is in justice entitled to know the identity of his opponents,” the court explained. “He cannot be obliged to struggle in the dark against unknown forces.” There are two exceptions to this rule, however. The first is where “identifying the client may expose the client to prosecution for criminal acts previously committed and for which the client had consulted the attorney,” the court said. The second is when disclosure would reveal “the substance of attorney-client communications.” Neither scenario was the situation here, the court said. Turning to the question of the duty to keep client secrets, the court explained that it is within a trial court’s discretion to determine what information may be obtained during the discovery phase of litigation, and what privileges-if any-exist to bar discovery. The court said it saw no abuse of discretion on Russell’s part. However, the court explained, Russell shouldn’t have issued a “prospective, self-executing order of dismissal.” In affirming Russell’s larger ruling, the court required that aspect of the order stricken. BID FOR RECONSIDERATION PLANNED Stolz says he’s planning to file a motion for reconsideration. If it isn’t granted, he says he’ll have two alternatives: provide the information or dismiss the case. “I don’t know what the decision will be, but I seriously doubt the case will be dismissed,” Stolz says. Stolz doesn’t see a problem if the source doesn’t want to reveal his identity and Tenet wants to continue its case. “Since the source is not a party to the law suit, and since the source was the first client [of Gambrell & Stolz] we would withdraw as counsel for Tenet,” Stolz says. But it’s not clear if such a withdrawal would relieve Stolz and Tenet from their obligations to reveal the tipster as required by Russell’s order. Stolz won’t speculate about whether his opposing counsel really knows the source’s identity. “I do think the identity of the source could have been ascertained had they [Louisiana] taken depositions. That was their call, not mine,” he says. But however this litigation plays out, Stolz says there’s one important thing to keep in mind. “The defendant in this case was doing something that was egregious. … The source has nothing to be ashamed of.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

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 © 2021 ALM Media Properties, LLC. All Rights Reserved.