Interesting issues relating to the Pennsylvania attorney-client privilege arise in the context of an email string or email chain involving corporate employees, where some, but not all, communications on the string are with counsel. Prior to the widespread use of email, many corporate decisions were made in face-to-face meetings with counsel present. When those meetings were for the purpose of seeking legal advice, the communications in those meetings, and documents reflecting the communications at those meetings, would be privileged. Now, email has, to an extent, replaced face-to-face meetings as the predominant method of discussion within a business enterprise. In the process, new issues of the application of the privilege have emerged.

In Rhoads Industries v. Building Materials Corp. of America , 254 F.R.D. 238 (E.D.Pa. 2008), the U.S. District Court for the Eastern District of Pennsylvania analyzed the extent to which communications may be withheld, and the proper way to assert the privilege, in situations involving email strings where some messages in the string contain communications with counsel and some do not. In a ruling that provides good direction to business litigation counsel on how to assert the privilege with respect to such email strings, the court explained, subject to other prerequisites for the application of the privilege, that:

1. Where an email string eventually sent to an attorney was initiated to gather facts for the purpose of obtaining legal advice, the email string is the modern-day equivalent of a face-to-face meeting with an attorney, such that all communications on the string, and not merely the communications with the attorney, can be withheld as privileged;

2. In such a situation, all such communications must be logged separately on a privilege log, although the separate log entries need not disclose that the communications were forwarded to an attorney; and

3. These principles do not apply where messages in the email chain are subsequently altered.

To put Rhoads in context, certain fundamental principles of the privilege should be discussed. The privilege, codified as 42 Pa.C.S. §5928, states: “In a civil matter counsel shall not be competent or permitted to testify to confidential communications made to him by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client.” The privilege bars testimony regarding confidential communications during the course of representation.

In litigation, the party claiming the privilege must initially establish that the privilege is properly invoked; then the burden shifts to the party seeking disclosure to establish that disclosure is appropriate. To satisfy the initial burden, a party must show (1) the holder of the privilege is or sought to become a client; (2) the communication was to a member of the bar or a subordinate; (3) the communication was to secure legal advice; and (4) the client has claimed, and not waived, the privilege. Recently, in Gillard v. AIG Insurance , 15 A.3d 44 (Pa. 2011), it was confirmed that the privilege operates in a two-way fashion to protect confidential client-to-attorney or attorney-to-client communications.

The presence of a third party during attorney-client communications will generally negate the privilege. However, communications with a subordinate such as a paralegal are generally protected if the subordinate is acting as the agent of the attorney. Likewise, the presence of a third party such as a consultant does not destroy the privilege where that party possesses a commonality of interest with the client.

When the client is a corporation, the privilege extends generally to communications between its attorney (including both in-house and outside counsel) and agents or employees authorized to act on the corporation’s behalf. As to in-house counsel, for the privilege to apply, the primary purpose of the communication must be to gain or provide legal assistance, because in-house counsel often plays a dual role of legal adviser and business adviser. As to non-attorney corporate employees, communications retain their privileged status only if the information is communicated on a need-to-know basis.

The privilege does not shield documents merely because they were routed through an attorney, and otherwise routine or generic communications transacting the general business of the company, unrelated to the provision of legal advice, do not become privileged merely because counsel is copied. Thus, with respect to corporate meetings (and records of the meeting), privilege is restricted to instances where employees secure legal, not business, advice or services. Finally, the privilege only protects disclosure of communications. It does not protect disclosure of underlying facts by those who communicated with the attorney.

(These principles are set forth, inter alia, in Southeastern Pennsylvania Transportation Authority v. CaremarkPCS Health , 254 F.R.D. 253 (E.D.Pa. 2008); SmithKline Beecham v. Apotex , 232 F.R.D. 467 (E.D.Pa. 2005); In re Flonase Antitrust Litigation , 723 F.Supp.2d 761 (E.D.Pa. 2010); Upjohn v. U.S ., 449 U.S. 383 (1981); and Andritz Sprout-Bauer v. Beazer East , 174 F.R.D. 609 (M.D.Pa. 1997).)

Subject to these principles, in Rhoads , Judge Michael M. Baylson attempted to address issues of the application of the privilege to email chains and strings in a corporate setting. Rhoads was a discovery dispute where the court issued an order requiring certain emails not placed on a privilege log by the plaintiff to be produced. The plaintiff sought clarification of that ruling because of the manner in which some of the privileged material appeared in email strings, i.e., a series of email messages by and between various individuals. Not all of the individual email messages in the strings were actual communications with an attorney for the purpose of seeking legal advice.

The Rhoads court discussed the unique privilege issues posed by email strings. According to the court, an email message is the electronic equivalent of a letter from one individual to one or more recipients, except that a prior email message can be manipulated, whereas a letter, generally, cannot. A person receiving an email message can, in replying or forwarding a message, delete other senders or recipients, or include only parts of the message.

The court noted that the end result of an email string seeking legal advice is similar to a face-to-face meeting in a conference room between an attorney and a client for the same purpose. With the modern-day innovation of email, persons working in different locations can communicate for the purpose of obtaining legal advice, and not all of those communications will be direct communications with attorneys. Often, after all of the facts are discussed among executives, the string will be sent to an attorney for legal advice. Other times, an attorney is included and copied in on the string earlier in the electronic conversation. With respect to these kinds of email strings, the email string can replace the old paradigm of a meeting and minutes from that meeting, and the same privilege that attaches to a meeting and minutes of that meeting will attach to the email string.

Thus, as a general matter, if the purpose of an email string is to gather facts and communicate those facts to the attorney for legal advice, the email communications serve as the functional equivalent of a face-to-face meeting, and although the facts contained in the emails are discoverable, all of the messages, not only the compilation of messages sent to the attorney, are privileged. If that is the case, the party claiming the privilege must separately log each email communication that is subject to the privilege; it is unacceptable to simply log the entire chain as one communication. In logging these emails, however, it is not necessary to disclose that all of the separate communications were forwarded to an attorney. As a caveat, Baylson explained that copies of email messages in email strings are protected only to the extent that they are “identical replicas” of the previously logged message.

Unfortunately, much of Baylson’s discussion did not directly inform his holding, because as to the two categories of email strings that were at issue, the court found that the privilege was waived as to certain messages because they were not properly logged. Thus, the analysis respecting email strings in Rhoads is technically dicta.

Nonetheless, Baylson provided a useful roadmap for the application of the privilege to email strings in litigation. Although Baylson explained that his analysis would not constitute a “black-letter rule,” following Rhoads (and assuming all of the other prerequisites for application of the privilege, described above, are met), an email string for the purpose of obtaining legal advice is analogous to a meeting for the same purpose, such that where an email string contains a number of email messages, sent for the purpose of gathering facts to secure a legal opinion, which are eventually sent to an attorney for the purpose of securing legal advice, the entire string, and all of the communications contained therein (to the extent the communications are not altered in subsequent communications) are privileged. To benefit from this principle, all email messages on a string must be set forth separately on a privilege log.

Importantly, a large part of the rationale for analogizing email strings to meetings was convenience and expense, as Baylson found that requiring a party to redact from the string privileged portions of the string, rather than claim privilege as to the entire string, would be unduly difficult. This statement seems to be a tacit admission that there are limitations to the applicability of this analysis, and that under the court’s paradigm, messages that are not, in fact, privileged could be properly withheld. Indeed, many email strings sent within a company do not start out as discussions with the intent to seek legal advice, but instead, initial emails will relate general business issues, and in the context of the discussion of those issues, a legal issue may arise for which a legal opinion is sought. Permitting litigants to withhold an entire email string, rather than focus on the content of each email in the string, could invite abuses and sanction the withholding of properly discoverable factual corporate communications relating to general business affairs. •

Andrew J. DeFalco is a business litigation attorney with Spector, Gadon & Rosen. He recently presented an accredited continuing legal education course titled “An Overview of the Pennsylvania Attorney-Client Privilege in a Corporate Setting,” and he has written extensively on business and corporate litigation issues. He can be reached at adefalco@lawsgr.com.