The Pennsylvania Supreme Court has just adopted a new test for waiver of the protection of the attorney work product doctrine, but it has reaffirmed the standard test for waiver of the attorney-client privilege. BouSamra v. Excela Health, __ A.3d __, 2019 WL 2509384 (Pa., June 18, 2019) is the story of a discovery dispute about one email sent among three people. The discovery dispute arose in a hospital context, but the tests are not limited to hospitals.
Excela operated a hospital. Its outside counsel sent an email containing legal advice and attorney work product to Excela’s Senior Vice-President and General Counsel, Fedele. If the email had stopped with Fedele, it would clearly have been protected by both attorney work product and attorney-client privilege. Excela had hired Jarrard, an outside public relations firm, to assist it in managing expected publicity about the results of certain peer review studies. Cate was the principal at Jarrard working on this issue. Fedele forward his outside counsel’s email to Cate, who disseminated it among her team at Jarrard. This triggered the discovery dispute based on waiver.
Did forwarding the email to the outside PR firm waive the protection of the attorney work product doctrine? The answer is maybe. The Supreme Court had not previously addressed waiver of attorney work product. Significantly, “confidentiality is not a cornerstone of the [attorney work product doctrine] privilege.” The Court stated that “[a]ttorney work product need be kept confidential only from the adversary.” The Court concluded, “we hold that the work product doctrine is waived when the work product is shared with an adversary, or disclosed in a manner which significantly increases the likelihood that an adversary or anticipated adversary will obtain it.”
The Court “recognize[d] that a fact intensive analysis is required to determine whether Fedele sending outside counsel’s email to Cate ‘significantly increased the likelihood that an adversary or potential adversary would obtain it.’” The Court remanded to the trial court to make factual findings. The Court instructed that the lower court “should consider whether a reasonable basis exists for the disclosing party to believe ‘that the recipient would keep the disclosed material confidential.’”
A dispute arose between the four member majority of the Supreme Court and a three member concurrence in an opinion by Justice Donohue about the importance of the manner of disclosure. The concurrence stated that “in applying the waiver test, the trial court will need to focus on whether Fedele, when disseminating outside counsel’s work product to Cate, took any or all of the necessary and available precautions to reduce or eliminate the likelihood that the information could be obtained” by the adversary. 2019 WL 2509347. The concurrence said that this test “requires a principal (if not exclusive) focus on the manner of disclosure – namely, a careful analysis of the manner in which the work product was disclosed to third parties, including what precautions (if any) were taken to safeguard against the possibility that the information could fall into the hands of an adversary.” (emphasis in original).
The majority agreed with the concurrence that the manner of dissemination was important but disagreed that the manner was dispositive in this case. According to the majority, the manner of disclosure was clear: Fedele forwarded the email to Cate who gave it to her team at Jarrard. According to the majority, “[d]epending on the facts of a given case, the disclosing party may have a reasonable basis to believe that the recipient will not disseminate the material to actual or anticipated adversaries, regardless of the explicit inclusion of instructions on confidentiality.” 2019 WL 2509384.
A separate concurring opinion by Justice Wecht noted an additional ground to expect confidentiality: “where the relationship between the disclosing party and the third party is governed by rules of professional conduct that entail a duty of confidentiality, it is reasonable to expect that the third party will maintain secrecy.” 2019 WL 2504320.
Justice Wecht discussed a case in which the attorney had retained the PR firm, though he added that this distinction was not dispositive. He stated that the third party’s employment status was less important than whether there was a reasonable basis to believe the recipient would keep the material confidential.
An additional dispute arose between the majority and Justice Donohue’s concurrence. The majority held that “[t]he purpose of the work product doctrine is to protect the mental impressions and processes of an attorney acting on behalf of a client, regardless of whether the work product was prepared in anticipation of litigation.” The majority stated that the work product rule, Pa.R.C.P. 4003.3, “makes clear that work product protection is not confined to materials prepared in anticipation of litigation ….” This is in response to Justice Donohue’s concurrence taking issue with protecting work product “without regard to whether counsel’s actions were undertaken in anticipation of (or in connection with) litigation.” 2019 WL 2509347.
Though disclosing to a third party work product may not result in waiver of work product protection, disclosing to a third party legal advice to a client here, and almost always, waives the attorney-client privilege. The attorney-client privilege is set forth in 42 Pa.C.S. § 5928, which codifies the common law. The purpose of this privilege is, of course, “to foster the free and open exchange of relevant information between the lawyer and client.” 2019 WL 2509384. “In light of this purpose, however, the privilege is deemed waived once confidential attorney-client communications are disclosed to a third party.”
The Court contrasted this case with cases upholding the privilege where an accountant and an accident reconstruction expert “were privy to confidential information as a necessary means of improving the comprehension between the lawyer and client which facilitated the lawyer’s ability to provide legal advice.” In the present case, sending the email to Cate did not assist either outside counsel or Fedele in providing legal advice to Excela. The email itself did not solicit advice or opinion from Cate. The outside counsel did not send the email to Cate.
The Court acknowledged that a third-party’s presence might be necessary for a lawyer to provide legal advice to a client. “Such a situation may, in instances unlike the present matter, involve soliciting advice or input from a public relations firm.” (italics in original). The Court acknowledged that “the modern practice of law, specifically for litigators, can involve managing and utilizing media relations. That involvement, however, does not always require, or permit, the disclosure of confidential information to a media consultant. Thus, while situations may arise that require a public relations firm to provide insight, advice or opinion on legal advice, the scope of such situations must remain narrowly tailored, as evidentiary privileges remain highly disfavored in Pennsylvania.”
This opinion makes one additional interesting point counsel should remember if a defendant corporation raises attorney-client privilege. For corporations, the attorney-client privilege is limited to directors, officers and other employees who may act on behalf of the corporation. Fedele, the Senior Vice-President and General Counsel, was a high ranking officer permitted to act on behalf of Excela. Fedele forwarded the email not only to Cate at Jarrard but also to other Excela employees. Since the Court held the attorney-client privilege waived by sending the email to Cate, the Court explicitly did not address whether the privilege was waived when Fedele sent the email to the other Excela employees. “[E]valuating this argument is a fact-intensive exercise because a court would be required to determine whether each individual included on the email was a director, officer, or other employee permitted to act on the corporation’s behalf.” Further, “it is unclear whether an in-house employee overseeing Excela’s communications, marketing, and public relations departments would be an individual capable of acting on behalf of the corporation ….”
