Thursday, June 9, 2016

New York Limits Common Interest Doctrine

An attorney-client privilege decision from the New York Court of Appeals limits the common interest doctrine.

This discovery dispute involves certain attorney-client communications that defendant Bank of America Corporation and defendant Countrywide Financial Corporation shared when the two entities were in the process of merging. Generally, communications between an attorney and a client that are made in the presence of or subsequently disclosed to third parties are not protected by the attorney-client privilege. Under the common interest doctrine, however, an attorney-client communication that is disclosed to a third party remains privileged if the third party shares a common legal interest with the client who made the communication and the communication is made in furtherance of that common legal interest. We hold today, as the courts in New York have held for over two decades, that any such communication must also relate to litigation, either pending or anticipated, in order for the exception to apply...

The question presently before us is whether to modify the existing requirement that shared communications be in furtherance of a common legal interest in pending or reasonably anticipated litigation in order to remain privileged from disclosure, by expanding the common interest doctrine to protect shared communications in furtherance of any common legal interest. We adhere to the litigation requirement that has historically existed in New York...

We conclude that the policy reasons for keeping a litigation limitation on the common interest doctrine outweigh any purported justification for doing away with it, and therefore maintain the narrow construction that New York courts have traditionally applied

 The court reversed the order of the Appellate Division for the First Judicial Department.

 Justice Rivera dissented

Whether this privilege should extend to confidential communications between separately represented parties, in which they have a common legal interest in a transaction, not involving pending or reasonably anticipated litigation, is the question posed in this appeal, and one which I would answer in the affirmative under the circumstances presented here. Given that the attorney-client privilege has no litigation requirement and the reality that clients often seek legal advice specifically to comply with legal and regulatory mandates and avoid litigation or liability, the privilege should apply to private client-attorney communications exchanged during the course of a transformative business enterprise, in which the parties commit to collaboration and exchange of client information to obtain legal advice aimed at compliance with transaction-related statutory and regulatory mandates.

The attorney-client privilege is a long-standing exception to the general rule promoting discovery as part of the truth-finding process, and one tolerated because it serves the individual and societal goals of furthering the proper administration of justice by encouraging the free flow of information essential to legal representation. It has never been limited to client communications involving pending or anticipated litigation. Even so, the privilege is deemed waived where a client shares information with a third party, under circumstances that reflect the client's disinterest in the continued protection of the confidences. However, where parties to a merger seek to comply with legal requirements and agree to treat as confidential any exchanges of information made for purposes of seeking legal and regulatory advice to complete the merger, the parties cannot be assumed to have vitiated the private nature of the information, or to harbor an unreasonable expectation of privacy in these exchanges. Therefore, extension of the attorney-client privilege to these communications is fully in line with the goals of our common law and the needs of our complex system of commercial regulation.

 This decision will, as Justice Rivera's dissent suggests, likely have a significant impact on legal advice in commercial transactions. (Mike Frisch)

June 9, 2016 in Privilege | Permalink | Comments (0)

Wednesday, June 8, 2016

Common Business Interest Does Not Establish Tripartite Privilege

The North Carolina Court of Appeals has held that the attorney-client privilege was inapplicable when a successor in interest purchases assets

This appeal requires us to consider the common interest doctrine, which extends the attorney-client privilege to communications between and among multiple parties sharing a common legal interest. We hold that an indemnification provision in an asset purchase agreement, standing alone, is insufficient to create a common legal interest between a civil litigant indemnitee and a third-party indemnitor.

The case involves a rent dispute

The record reflects that when faced with a specific request for their communications with Blast, Defendants promptly asserted the attorney-client privilege. During the 11 February 2015 deposition, counsel for Plaintiff asked the deponent, Mid-Atlantic’s General Counsel Earl Acquaviva, to describe “all of the conversations that you have had personally with Blast or any representatives of Blast about this lawsuit.” Defendants’ counsel immediately objected on the basis of attorney-client privilege and advised the deponent not to answer. Plaintiff’s further attempts to probe the issue were all met with similar objections by Defendants’ counsel, and the deponent refused to answer such questions...

we hold that Defendants properly asserted the attorney-client privilege in a manner that is neither frivolous nor insubstantial and that this interlocutory appeal affects a “substantial right” of Defendants. We therefore deny Plaintiff’s motion to dismiss.

The tripartite privilege

The linchpin in any analysis of a tripartite attorney-client relationship is the finding of a common legal interest between the attorney, client, and third party. See Raymond, 365 N.C. at 100, 721 S.E.2d at 927 (tripartite attorney-client relationship existed between attorney, client, and benevolence organization due to the common interest of “protecting and promoting the livelihood” of the client). “[T]he parties must first share a common interest about a legal matter.” United States v. Aramony, 88 F.3d 1369, 1392 (4th Cir. 1996)

...To extend the attorney-client privilege between or among them, parties must (1) share a common interest; (2) agree to exchange information for the purpose of facilitating legal representation of the parties; and (3) the information must otherwise be confidential. Schwimmer, 892 F.2d at 243–244. Although prudent counsel would always put a representation agreement in writing, there is no requirement that the agreement be in writing.

...The indemnification provision in the asset purchase agreement requires Blast to defend and indemnify Defendants from “[l]osses incurred or sustained . . . on account of or relating to . . . the use of the [a]ssets by [p]urchaser and the operation of the . . . [h]ealth [c]lubs . . . .” This language, and the nature of the asset purchase agreement, are most similar to the purchase agreement which was held to be insufficient in SCR-Tech to create a tripartite privileged relationship.

...We hold that Defendants and Blast shared a common business interest as opposed to the common legal interest necessary to support a tripartite attorney-client relationship. Consequently, we hold that the trial court did not abuse its discretion in compelling Defendants to produce the documents.

(Mike Frisch)

June 8, 2016 in Privilege | Permalink | Comments (0)

Tuesday, May 17, 2016

Privileged Legal Bills

Dan Trevas reports a case decided today by the Ohio Supreme Court

When attorney-fee billing statements with detailed information about the tasks undertaken by a law firm representing a city are intertwined with summaries of the legal work performed, the detailed information is not a public record, the Ohio Supreme Court ruled today.

The Supreme Court voted 5-2 to affirm a Ninth District Court of Appeals decision to release redacted copies of invoices from a law firm representing Avon Lake to James E. Pietrangelo II. The records are connected to pending litigation between Avon Lake and Pietrangelo. In a per curiam decision, the Court majority reasoned that Pietrangelo may acquire information useful in his litigation strategy against the city if provided more details than what the Ninth District permitted to be released.

In a dissenting opinion, Justice Sharon L. Kennedy wrote that only the narrative summary portion of the bills describing the work the firm did can be withheld and that Pietrangelo is entitled to more information as well as damages from Avon Lake.

Detailed Information Sought

Pietrangelo requested from the city and its law director the invoices from a law firm for services it rendered concerning his lawsuit. The city provided copies of invoices with the name of the firm, the general matter for which services were provided, the date of the invoice, the total fees billed for the period, and itemized expenses.

The city redacted the remaining information on the invoices citing exemptions for attorney-client privilege and attorney-work product. The information that was redacted included narrative descriptions of the particular legal services rendered, the name of each attorney in the firm providing services along with the service provided, the time spent, the billing rate, the total number hours billed, and the total fee attributed to each attorney.

Pietrangelo filed a writ of mandamus with the Ninth District to compel the city to provide unredacted invoices and requested statutory damages and attorney fees. Pietrangelo and Avon Lake both filed for summary judgment, but the Ninth District determined it could not side with a party without more information and ordered the city to file unredacted copies of the billing statements for the judges to review under seal.

After review, in March 2015 the Ninth District concluded the city disclosed all the records not exempt from disclosure by the Ohio Public Records Act, which is R.C. 143.43, except for one portion. The Ninth District found the part of the invoice titled “professional fee summary,” that described the hours, rates, and money charged for services was not exempt. It ordered the city to provide Pietrangelo with copies of the billing statements that included the professional fee summary.

The Ninth District denied Pietrangelo’s request for the fully unredacted records plus damages and attorney fees. He appealed to the Supreme Court, which agreed to hear the case.

Extent of Attorney-Client Privilege at Issue

Citing its 2011 State ex rel. Dawson v. Bloom-Carroll Local School Dist. decision, the Court’s opinion explains that narrative portions of itemized attorney billing statements containing descriptions of legal services are protected by attorney-client privilege and are not public records.

Pietrangelo argued that based on the Court’s 2012 State ex rel. Anderson v. Vermillion decision he is entitled to all the dates legal services were performed along with the hours and rates of services, which is more than what is provided in the professional fee summary. The Court in Anderson stated that “the general title of the matter being handled, the dates services were performed, and the hours, rates and money charged for the services,” on an attorney billing statement need to be disclosed.

The Court explained that Anderson was the former mayor of Vermillion and was seeking the billing statements regarding the legal services provided to the new mayor. His entire request was denied. The Court ordered Vermillion to turn over all of the billing statements, ruling only the narrative portions were exempt from the public records act by attorney-client privilege.

Avon Lake argued the situation with Pietrangelo is similar to the Dawson case where a parent sought billing statements for legal services provided to the school district regarding pending litigation between the district, the parent and her children. The district provided summaries with the attorney’s name, invoice total, and the matter involved, but withheld the actual invoices because they contained confidential information.

The Court allowed the district to withhold the invoices because the information in the invoices was “either covered by attorney-client privilege or so inextricably intertwined with privileged materials as to also be exempt from disclosure.”

“Like Dawson, the records that Pietrangelo seeks relate to the pending litigation between the parties. If disclosed, Pietrangelo may acquire information that would be useful in his litigation strategy against the city, whereas in Anderson, any harm from disclosure of attorney-client communication was remote and speculative,” the Court stated. “To the extent that Pietrangelo requests the dates, hours, and rates not identified in the professional-fee summary, they are inextricably intertwined with the narratives of services that are privileged materials. Such information is exempt from disclosure.”

Pietrangelo also sought $1,000 in statutory damages and attorney fees because the Ninth District found the city did not fully comply with the public records law. The Court affirmed the Ninth District’s denial of Pietrangelo’s request because Avon Lake reasonably believed it was entitled to withhold the information it did.

Chief Justice Maureen O’Connor and Justices Paul E. Pfeifer, Terrence O’Donnell, Judith Ann Lanzinger, and William M. O’Neill joined the opinion.

More Disclosure Required, Dissent Maintains

In her dissent, Justice Kennedy stated she would order the redaction of only the narrative services information and release all the other information on the billing statements to Pietrangelo in accordance with the Ohio Public Records Act.

She further disagreed with the majority’s conclusion that the relevant distinction between Dawson and Anderson regarding what information is subject to disclosure is whether litigation is pending between the record requestor and the government entity. Instead, Justice Kennedy wrote that the fact the records requestor is involved in litigation against the government body should have no bearing on whether the records are public.

“Whether a public-records requestor and a government entity are engaged in litigation is irrelevant to the question of whether the information in an itemized attorney-fee billing statement is privileged and exempt from disclosure. Instead, our case law mandates the proper focus is on the information sought and whether that information is privileged,” she wrote.

The relevant distinction between the two cases was that the school board in Dawson reduced the nonexempt information to a summary and released it, whereas the city in Anderson denied the request and failed to provide an alternative record.

Justice Kennedy recognized that the narrative portions of a billing statement containing descriptions of legal service are protected by the attorney-client privilege and not subject to disclosure. She explained that the billing statements at issue contain summary information on the first two pages, and that all subsequent pages contain four independent columns divided into the categories of date, name, services, and hours. Each billing statement concluded with the total number of hours invoiced, a professional fee summary, disbursements and expenses, and a total invoice amount.

She wrote the majority’s reliance upon Dawson to conclude that the date, name, and hours information was inextricably intertwined with the narrative of the services was disingenuous. She noted that Dawson offered little discussion of how the billing statements were constituted, whereas the format used in the statements to Avon Lake separated the information about the attorneys providing the services and the hours billed so that they “are not intertwined with the narrative services column.”

Justice Kennedy reasoned that the ability to redact the narrative services column mandated all remaining portions of the billing statements be released. By affirming the appellate court's decision not to release the remaining non-exempt portions of the billing statements the majority created a new “redundancy” exemption not authorized by the General Assembly she concluded.

Justice Kennedy would have also granted Pietrangelo damages because after Anderson decision it should have been clear to Avon Lake what information in a billing statement was privileged and what must be disclosed.

“Subsequently, no well-informed public office could reasonably believe that any portion of an attorney-fee billing statement, other than the narrative description of the legal services performed, is subject to redaction,” she wrote.

Justice Judith L. French joined the dissent.

2015-0495. State ex rel. Pietrangelo v. Avon Lake, Slip Opinion No. 2016-Ohio-2974.

(Mike Frisch)

May 17, 2016 in Billable Hours, Clients, Privilege | Permalink | Comments (0)

Wednesday, December 9, 2015

No Threats Exception

The Minnesota Supreme Court has held

This case requires us to determine whether the therapist-client privilege, which prohibits therapists from disclosing information or opinions in court that they acquired from their clients in a professional capacity, contains an exception for threatening statements. The district court concluded that the privilege does not apply to "statements of imminent threat of harm." The court of appeals reversed, holding that the statute codifying the privilege, Minn. Stat. § 595.02, subd. 1(g) (2014), does not contain an exception for threats. We agree with the court of appeals that the statute does not contain a "threats exception," but disagree that the privilege extends to third parties.

The story

 As a condition of his probation for a prior conviction, respondent Jerry Expose, Jr. was required to attend anger-management therapy sessions with N.M., a mental-health practitioner. During one session, Expose became upset and made a threatening statement about D.P., a caseworker assigned to an ongoing child-protection case involving Expose’s children. Expose said that D.P. had told him recently that his continued noncompliance with a requirement of his case plan would delay the commencement of unsupervised visits with his children. Expose then became visibly angry and said that

he felt that [D.P.] was a barrier to him getting his kids back and if court—his future court date did not go the right way that he would break her back, and then if he could not get to her he would call—he’d just have to make a couple phone calls and he can have someone else do it if he couldn’t get to her.

N.M. responded to the threatening statement by informing Expose that she was a mandated reporter, to which he replied, "I don’t give a f--k." N.M. then "proceeded to help him de-escalate and calm down," but Expose made additional statements about D.P., including that "[e]verybody has to go to their car at some point."

Based on her training, N.M. determined that Expose’s statements were not idle threats. Instead, she concluded that Expose had made specific threats of physical violence against an identifiable person that triggered her statutory duty to warn. See Minn. Stat. § 148.975 (2014). To discharge the duty, N.M. reported Expose’s statements to her supervisor, D.P., and the police.

 N.M. testified at trial. The Court of Appeals reversed the ensuing conviction.

Here

the therapist-client privilege statute lacks a "threats exception," either by implication from the duty-to-warn statute or under our authority to promulgate rules of evidence. The district court therefore abused its discretion when it allowed N.M. to testify about Expose’s allegedly threatening statements without his consent.

The court found that the error was not harmless and the Court of Appeals correctly reversed the conviction. (Mike Frisch)

December 9, 2015 in Comparative Professions, Privilege | Permalink | Comments (0)

Thursday, October 8, 2015

Fiduciary Exception and Adversity Explored

An opinion on attorney-client privilege from the New York Appellate Division for the First Judicial Department

This appeal arises from a discovery dispute in which the managers of a limited liability company and corporate counsel invoke the attorney-client privilege in opposition to document requests by one of the company's investors. The investor argues that it is entitled to the so-called fiduciary exception to the privilege because it is a beneficiary of the attorney-client relationship that exists between the company's managers and counsel. The managers and counsel, on the other hand, contend that because the investor had interests that were adverse to the company's interests, the fiduciary exception is inapplicable. Supreme Court found that the parties were not adverse, and ordered the production of all the documents claimed to be privileged.

We conclude that "adversity" is not a threshold issue in determining whether the fiduciary exception is applicable in a given case, but one of several factors to consider in making that determination, and that adversity cannot be determined without a review of the purportedly privileged communications. Therefore, we remand the matter for an in camera review of the withheld documents and a full analysis of whether the exception is applicable in this case. Absent a more deliberate review and analysis, the risk of disclosure of privileged communications is manifest.

The case was an appeal from a special referee's production order.

The court recognized the "fiduciary" exception and held

 although defendants do not take issue with the motion court's finding of good cause — they focus on the determination that there never was an adversarial relationship between NAMA and Alliance — we conclude that the case must be remanded for the court to conduct a comprehensive good-cause analysis. The court, given its discretion under CPLR article 31, may not need to evaluate each factor listed in Garner. However, where a court finds that a shareholder has demonstrated good cause to apply the fiduciary exception and pierce the corporate attorney-client privilege, it must at least address those factors that support such a finding. This type of scrutiny is vital to ensure that courts do not arbitrarily order disclosure of corporate attorney-client communications...

 The adversity question is therefore not one of timing, as defendants contend, but is answered by the communications' content. For this reason, we reject defendants' argument that, if NAMA were adverse to Alliance at some point, all subsequent communications between the Managers and the Attorneys would rest beyond the fiduciary exception's reach. Communications regarding defendants' alleged breach of fiduciary duties could have occurred at the same time as attorney-client communications regarding how to deal with NAMA (for example, during the California arbitration); it would frustrate the balancing of interests in attorney-client privilege cases to permit defendants to withhold communications that might reveal the alleged wrongful conduct simply because the parties were adverse at some point in the past. Thus, the motion court correctly stated that whether communications that occurred after an adversarial relationship developed are privileged depends on their content.

This is where a court's ability to conduct in camera review of the communications is crucial (see Spectrum Sys. Intl., 78 NY2d at 378 ["whether a particular document is or is not protected is necessarily a fact-specific determination, most often requiring in camera review"] [*12][internal citation omitted]; see also Stenovich, 195 Misc 2d at 102 [discussing court's in camera review of arguably privileged documents]). Absent a review of the communications (or at least a sampling thereof), it would be impossible to determine whether they involved advice concerning the instant litigation or "how to deal with" NAMA.

The matter was remanded for further proceedings. (Mike Frisch)

October 8, 2015 in Privilege | Permalink | Comments (0)

Monday, August 3, 2015

Error To Allow Deposition Of Counsel

The South Dakota Supreme Court held that a trial court had violated the attorney-client privilege by allowing the deposition of a party's attorney and admitting his admissions at trial.

This case arose out of a foreclosure action brought by Voorhees Cattle Co. (Voorhees) against Dakota Feeding Co. (DFC). In its answer to the complaint, DFC filed a third party complaint against B and B Equipment, Inc. (B & B) for breach of contract; B & B counterclaimed alleging impossibility of performance and breach of contract by DFC...

As a result of the fraud allegations, counsel for Voorhees, Thomas M. Maher, sought to depose DFC’s counsel William Van Camp and subpoenaed his records concerning his representation of DFC. Van Camp moved to quash the subpoena and enter a protective order.

Below

The court held a hearing on the motion on October 2, 2013. Van Camp argued that there was no applicable fraud exception to the attorney-client privilege and that he was acting as “an ordinary attorney” by performing due diligence on the transaction. Further, he stated that there is no statute or case law in South Dakota that allows an attorney to be deposed in ongoing litigation because of a fraud complaint such as this. Van Camp explained he was resisting the motion, in part because “they can conduct the discovery they want from my client, the discovery they want from DENR to see what information is there.” 

The deposition was taken and admissions from that deposition were admitted at trial.

The court found that this was error

Even if the court found that the communications may not have been privileged or that waiver was an issue, it should have considered whether deposing opposing counsel was the appropriate means of acquiring the information sought. The court failed to consider the implications of allowing discovery without bounds by the extraordinary means of requesting admissions from opposing counsel regarding client communications, deposing opposing counsel, and issuing a subpoena for the production of materials from counsel’s case files. “Taking the deposition of opposing counsel not only disrupts the adversarial system and lowers the standards of the profession, but it also adds to the already burdensome time and costs of litigation.” Shelton v. Am. Motors Corp., 805 F.2d 1323, 1327 (8th Cir. 1986).

Opposing counsel “is [not] absolutely immune from being deposed.” Id. However, the circumstances under which opposing counsel may be deposed “should be limited to where the party seeking to take the deposition has shown that (1) no other means exist to obtain the information than to depose opposing counsel, (2) the information sought is relevant and nonprivileged; and (3) the information is crucial to the preparation of the case.” Id. (citation omitted). In this case, none of these considerations were taken into account. The court did not analyze the necessity for the discovery or consider reasonable alternative sources such as DFC’s principals or other witnesses such as the DENR employees that may have spoken with DFC’s attorney.

The judgment was nonetheless affirmed

Even though the privileged communications should not have been introduced, nor the deposition of the attorney and further discovery of attorney client privileged material allowed, those communications were germane to the claim by Voorhees, which is not being appealed because DFC satisfied the judgment against it. The communications did not prove, nor go to the heart of B & B’s claims...

The only issue between B & B and DFC decided by the jury was the amount of money owed B & B for the work done on the feedlot. As a result, the erroneous admission of the privileged communications was not unfairly prejudicial to DFC as against B & B. DFC’s claim that the error tainted the trial is not sufficient.

(Mike Frisch)

 

August 3, 2015 in Hot Topics, Privilege | Permalink | Comments (0)

Sunday, November 30, 2014

California Upholds Internal Communication Law Firm Privilege

A decision issued last week by the California Court of Appeals, Second District, Division Three holds

The question before us is whether the attorney-client privilege applies to intrafirm communications between attorneys concerning disputes with a current client, when that client later sues the firm for malpractice. We conclude that when an attorney representing a current client seeks legal advice from an in-house attorney concerning a dispute with the client, the attorney-client privilege may apply to their confidential communications. Adoption of the so-called "fiduciary" and "current client" exceptions to the attorney-client privilege is contrary to California law because California courts are not at liberty to create implied exceptions to the attorney-client privilege. In the unpublished portion of the opinion, we hold that the exceptions to the attorney-client privilege embodied in Evidence Code sections 958 and 962 do not apply to the circumstances presented here. Accordingly, we grant in part the petition of Edwards Wildman Palmer LLP and Dominique Shelton for a writ of mandate, and remand to the trial court for further proceedings.

The court cites the Massachusetts and Georgia cases as well as the Chambliss law review article.

The client had retained the law firm to pursue an invasion of privacy claim against the Daily Mail. As the court noted

The relationship between [client] Mireskandari and the Firm was short lived and, for the most part, contentious.

The court rejected the suggestion that internal counsel and the client were "joint clients" of the firm

Shelton and Mireskandari were not joint clients for purposes of section 962. Shelton and Mireskandari did not retain the Firm "upon a matter of common interest." Mireskandari retained the Firm and Shelton to represent him in the Daily Mail case; Shelton consulted with in-house counsel not as a party to that action, but to obtain advice on how best to address Mireskandari's complaints about billing and his threats to hold the firm responsible for any damages he suffered. Mireskandari and Shelton were not co-parties; they did not employ the same attorney to oppose claims of an adversary or pursue a claim as joint plaintiffs; they were not represented by the same attorney in a business transaction.

The court vacated an order that had permitted discovery into the firm's internal communications.

Thank you to my former student Daniel Woofter for sending me the case. His article from the Georgetown Journal of Legal Ethics is cited in the opinion. (Mike Frisch)

November 30, 2014 in Hot Topics, Law Firms, Privilege | Permalink | Comments (0) | TrackBack (0)

Monday, July 21, 2014

A Common Interest, A Common Privilege

In a matter involving the application of the common interest rule in attorney-client privilege law, the New Jersey Supreme Court has held that

The common interest rule is designed to permit the free flow of information between or among counsel who represent clients with a commonality of purpose. It offers all parties to the exchange the real possibility for better representation by making more information available to inform decision-making in anticipation of litigation. Although the Court recognizes that any privilege, including the attorney-client privilege and work-product protection, restricts the disclosure of information and may intrude on the fact-finding function of litigation, the Court finds that the rule recognized in LaPorta strikes an acceptable balance of competing interests. The Court, therefore, expressly adopts the common interest rule as articulated in LaPorta. Common purpose extends to sharing of trial preparation efforts between attorneys against a common adversary. The attorneys need not be involved in the same litigated matter or anticipated matter. The rule also encompasses the situation in which certain disclosures of privileged material are made to another attorney who shares a common purpose, for the limited purpose of considering whether he and his client should participate in a common interest arrangement. (pp. 33-37)

The protected attorney work product disclosed by Sufrin to the municipal attorney remained privileged pursuant to the common interest rule. Sufrin and Longport shared a common purpose at the time of the disclosure because Longport had defended many civil actions filed against it by O’Boyle and anticipated further litigation from O’Boyle, and Sufrin was attempting to defend a civil action commenced by O’Boyle arising out of one client’s official position and others’ participation in civic affairs. Sufrin also disclosed his work product in a manner calculated to preserve its confidentiality. There is no evidence that the municipal attorney shared the material with anyone else, including O’Boyle. Once the municipal attorney declined to enter a joint defense strategy, he returned the privileged material, thereby minimizing even an inadvertent disclosure. Finally, although privileges may be overcome by a showing of particularized need under the common law right of access, O’Boyle failed to demonstrate a particularized need for the privileged material supplied to the municipal attorney. (pp. 37-39)

The holding

...we expressly adopt the common interest rule as previously articulated in LaPorta, supra, 340 N.J. Super. at 254, 262-63. We also hold that Sufrin, who represented a former municipal official and private residents in litigation filed by O’Boyle, shared a common purpose with Longport at the time he disclosed work product to the municipal attorney. Therefore, the joint strategy memorandum, and the CDs containing documents obtained and produced by the private attorney were not government records subject to production in response to an OPRA request by O’Boyle. Finally, O’Boyle failed to articulate a particularized need as required by the common law right of access to obtain the work product of the private attorney.

The litigation involved access to public records. (Mike Frisch)

July 21, 2014 in Privilege | Permalink | Comments (0) | TrackBack (0)

Saturday, May 31, 2014

Oregon Rejects Fiduciary Exception

The Oregon Supreme Court held that a law firm's communications with in-house counsel were protected from disclosure from the now-former client.

The court reversed an order of production based on the so-called "fiduciary exception" to the attorney-client privilege

We conclude that OEC 503(4) was intended as a complete enumeration of the exceptions to the attorney-client privilege. Insofar as that list does not include a “fiduciary exception,” that exception does not exist in Oregon, and the trial court erred in relying on that exception to compel production of communications that otherwise fell within the general scope of the privilege. It follows that the trial court’s order must be vacated to the extent that it orders production of communications that were otherwise within the privilege. 
 
The litigation involved a dispute between Davis Wright Tremaine and a former client. (Mike Frisch)

May 31, 2014 in Current Affairs, Privilege | Permalink | Comments (0) | TrackBack (0)

Friday, May 16, 2014

Testamentary Exception To Attorney-Client Privilege Recognized

A busy day for attorney issues in the Maryland Court of Appeals.

In addition to three disbarments (two of which we have linked to), the court held

As evidenced by this Court’s holding in Benzinger, the testamentary exception has existed in Maryland for close to a century, despite never having been formally named. Nonetheless, it has been some time since this Court has spoken on the testamentary exception. For this reason, we reaffirm that in a dispute between putative heirs or devisees under a will or trust, the attorney-client privilege does not bar admission of testimony and evidence regarding communication between the decedent and any attorneys involved in the creation of the instrument, provided that evidence or testimony tends to help clarify the donative intent of the decedent.

(Mike Frisch)

May 16, 2014 in Privilege | Permalink | Comments (0) | TrackBack (0)

Tuesday, April 15, 2014

Dru Stevenson on being Against Confidentiality

Two points to make about confidentiality, just as all us ethics profs are about to (spoiler alert) examine on it. One is that I note that there is an interesting article in the current Litigation magazine (the ABA's journal by the Section on Litgation) on whether confidentiality and privilege survive death. It's not yet posted on their website, so look for it in print or anticipate it online. It notes that the successor law firm to Lizzie Borden's counsel circa 1892 is still safeguarding its (really, her) records. I foresee a poem about the privilege here, but what rhymes with "privilege"? One point six does not quite rhyme with ax.

The more accessible point is that Drury D. Stevenson (South Texas, Law) has posted to SSRN an article that, to me, follows in the tradition of the late Fred Zacahrias. Dru's title is Against Confidentiality and his abstract is:

Confidentiality rules form an important part of the ethical codes for lawyers, as a modern, expansive extension of the traditional attorney-client privilege doctrine. The legal academy, judiciary, and practitioners generally agree on the conventional wisdom that strict confidentiality rules are necessary to foster client-lawyer communication, thereby providing lawyers with information they need for effective representation. Yet this premise is demonstrably false – clients withhold information or lie to their lawyers despite the confidentiality rules, and the rules are mostly redundant with other ethical rules, evidentiary doctrines, and effective market mechanisms for protecting client privacy interests. At the same time, the confidentiality rules impose significant social costs – direct externalities, lemons effects, and even serious harm to third parties.

This Article argues that the lawyer confidentiality rules are ripe for repeal, revision, or rejection in the form of civil disobedience in certain cases. Using analytical tools from economics, including the Coase Theorem, this Article goes beyond previous criticisms of the rules to provide an extensive analysis of the social costs – and illusory benefits – of the ethical rules that compel lawyers to conceal client secrets. The rules undermine public trust in the legal system, and overall transparency and cooperation in society. In extreme instances, the rules facilitate wrongful convictions of innocent third parties and other serious harms. In relation to the other ethical rules, the confidentiality rules are generally in tension with, or redundant of, other rules designed to protect clients and third parties. The Article concludes with specific normative proposals for revising the rules, or challenging the existing rules as a way to force reforms.

[Alan Childress]

April 15, 2014 in Abstracts Highlights - Academic Articles on the Legal Profession, Privilege | Permalink | Comments (0) | TrackBack (0)

Thursday, January 23, 2014

Balancing The Attorney-Client And Physician-Patient Privileges

The Washington State Supreme Court has held that "an attorney hired by a corporate defendant to investigate or litigate an alleged negligent event may engage in privileged (ex parte) communications with the corporation's physician employee where the physician-employee has firsthand knowledge of the alleged negligent event and where the communications are limited to the facts of the alleged negligent event."

The ruling does not encompass health care provided before and after the event that resulted in litigation.

The court considered the application of the rule from a 1988 decision that barred ex parte communication between a doctor and his or her employer's attorney "where the employer is a corporation and named defendant whose corporate attorney-client privilege likely extends to the physician, at least as to certain subjects" and "balance[d] the values underlying the attorney-client privilege against those underlying the physician-patient privilege."

Justice Stephens concurred and dissented, finding the court's new rule an "unworkable" one that "erodes the sound policy decision" of the earlier case. (Mike Frisch)

January 23, 2014 in Privilege | Permalink | Comments (0) | TrackBack (0)

Friday, December 20, 2013

"The Understatement Of the Year"

Two attorneys who had represented opposing parties in civil litigation ended up in litigation against each other.

The Maryland Court of Appeals affirmed dismissal of the case, noting that "[t]o characterize Farmer and Mixter's relationship as acrimonious might be the understatement of the year. This court is sadly too familiar with the antics of these litigants from a dispute a few years ago..."

After the earlier case settled, Farmer "was so infuriated by Mixter's behavior that he sought sanctions against him."  Sanctions were imposed but reversed on appeal.

Farmer then sent twenty letters to various Maryland lawyers that alleged "unprofessional behavior" and sought information for a bar complaint. Mixter responded with a suit for defamation. Famer sent more letters to attorneys and filed a bar grievance against Mixter.

The court here affirmed the the dismissal of the Mixter suit against Farmer and a second attorney who allegedly conspired with him based on absolute judicial privilege grounds

Because [Attorney Grievance Commission] complaints are not published and lawyers' exposure is protected to a reasonable degree, we are unwilling to overlook the absolute privilege accorded to the AGC process simply because appellant feels aggrieved by the situation.

(Mike Frisch)

December 20, 2013 in Hot Topics, Privilege | Permalink | Comments (0) | TrackBack (0)

Monday, December 9, 2013

Disclosure Of Attorney's Files Sustained

The New Hampshire Supreme Court affirmed an order holding that an attorney's file is subject to disclosure in a probate matter.

The attorney was consulted twice, but not retained, for estate planning of a deceased couple. One of the brothers claims that the other brother exercised undue influence on the parents

...because the Attorney's file is relevant to an issue between the parties who claim through the same deceased client, we hold that the trial court did not unsustainably exercvise its discretion in allowing the file to be disclosed to the parties under [rules of evidence].

The court also sustained disclosure of correspondence between the attorney and one of the brothers. (Mike Frisch)

December 9, 2013 in Clients, Privilege | Permalink | Comments (0) | TrackBack (0)

Thursday, October 24, 2013

A Trip To Spain

An e-mail from Kean University's head basketball coach to the University's general counsel is protected by the attorney-client privilege, according to a decision issued today by the New Jersey Appellate Division.

The plaintiff in the litigation is the former athletic director, who was terminated "supposedly for failure to properly supervise subordinates in the athletic program, which led to the University being sanctioned" by the NCAA.

He sued for wrongful termination.

The e-mail had been in connection with a fundraising letter to defray costs of a team summer trip to Spain.

The court majority noted that the trial court found the e-mail to be privileged but found waiver. The court here agreed on privilege and reversed on the waiver issue.

The coach had provided the e-mail to the NCAA. The court concluded that the University, not the coach, had authority to waive the privilege.

A dissent concludes that the e-mail was not sent for the purpose of securing legal advice and thus was not privileged.

NJ.com reported on the NCAA actions. (Mike Frisch)

October 24, 2013 in Privilege | Permalink | Comments (0) | TrackBack (0)

Wednesday, July 10, 2013

In-House Privilege Upheld By Massachusetts Court

A significant decision today by the Massachusetts Supreme Judicial Court.

The issue and holding:

The issue presented on appeal is whether confidential communications between law firm attorneys and a law firm's in-house counsel concerning a malpractice claim asserted by a current client of the firm are protected from disclosure to the client by the attorney-client privilege.  We conclude that they are, provided that (1) the law firm has designated an attorney or attorneys within the firm to represent the firm as in-house counsel, (2) the in-house counsel has not performed any work on the client matter at issue or a substantially related matter, (3) the time spent by the attorneys in these communications with in-house counsel is not billed to a client, and (4) the communications are made in confidence and kept confidential.  Because these criteria were met in this case, we affirm the judge's order allowing the defendant law firm and its attorneys to invoke the attorney-client privilege to preserve the  confidentiality of these communications.

The law firm was retained by a commercial lender to investigate title and foreclose on property secured by what the lender thought was a first mortgage. A third party claimed a superior interest in the property.

A year later, the client (through outside counsel) sent the law firm a draft complaint alleging malpractice and breach of contract. 

The lawyers in the firm then consulted with the firm partner "designated to respond to ethical questions and risk management issues on behalf of [the firm]..."

The court underscored the importance of the ethics attorney function:

Where a law firm designates one or more attorneys to serve as its in-house counsel on ethical, regulatory, and risk management issues that are crucial to the firm's reputation and financial success, the attorney-client privilege serves the same purpose as it does for corporations or governmental entities: it guarantees the confidentiality necessary to ensure that the firm's partners, associates, and staff employees provide the information needed to obtain sound legal advice.  See Hertzog, Calamari & Gleason v. Prudential Ins. Co. of Am., 850 F.Supp. 255, 255 (S.D.N.Y.1994) ("No principled reason appears for denying ... attorney-client privilege to a law partnership which elects to use a partner or associate as counsel of record in a litigated matter").  "[B]road protection of communications with law firm in-house counsel, including communication about the representation of a current client of the firm, ... would encourage firm members to seek early advice about their duties to clients and to correct mistakes or lapses, if possible, to alleviate harm." Chambliss, supra at 1724.  As the United States District Court for the Southern District of Ohio recently noted: 

"[I]ndividual lawyers who come to the realization that they have made some error in pursuing their client's legal matters should be encouraged to seek advice promptly about how to correct the error, and to make full disclosure to the attorney from whom that advice is sought about what was done or not done, so that the advice may stand some chance of allowing the mistake to be rectified before the client is irreparably damaged.  If such lawyers believe that these communications will eventually be revealed to the client in the context of a legal malpractice case, they will be much less likely to seek prompt advice from members of the same firm."


The court rejected a differing result when the situation involves a current, rather than former, client:

In law, as in architecture, form should follow function, and we prefer a formulation of the attorney-client privilege that encourages attorneys faced with the threat of legal action by a client to seek the legal advice of in-house ethics counsel before deciding whether they must withdraw from the representation to one that would encourage attorneys to withdraw or disclose a poorly understood potential conflict before seeking such advice.  The "current client" exception is a flawed interpretation of the rules of professional conduct that yields a dysfunctional result.  See N.Y. St. Bar Ass'n Comm. on  Prof. Ethics, Op. 789 (2005) ("We do not believe that the conflicts rules ... were intended to prohibit ethics consultation when it is most helpful:  during the client representation").  As such, we decline to adopt it in Massachusetts.

Briefs were submitted by several amicus curiae, including the Association of Professional Responsibility Lawyers, the American Bar Association and the Attorneys' Liability Assurance Society, Inc.

The case is RFF Family Partnership, LP v. Burns & Levinson LLP. One should be able to access the decision through this link.

Law firm ethics counsel --every firm of sufficient size needs one. (Mike Frisch)

July 10, 2013 in Current Affairs, Hot Topics, Privilege | Permalink | Comments (0) | TrackBack (0)

Tuesday, May 14, 2013

Can State Get Access To Appointed Counsel Forms?

The New Jersey Supreme Court has held that the State's subpoena for an indicted defendant's application (with financial information) for court-appointed counsel was properly quashed.

The defendant is indicted for financial crimes. The State's investigation "suggested that defendant owned substantial assets."

The court modified an existing directive to permit disclosure for the purpose of investigating potential false statements of financial status in the future.

The court did not reach the issue whether the attorney-client privilege protect the form from disclosure. In the future, a fact-specific inquiry must be conducted "in accordance with settled principles governing the privilege. (Mike Frisch)

May 14, 2013 in Privilege | Permalink | Comments (0) | TrackBack (0)

Monday, May 13, 2013

Asking Sherwin-Williams

A recent Rhode Island Supreme Court decision is summarized on the court's web page:

Before this Court is the appeal of Sherwin-Williams Company (Sherwin-Williams) from an order denying its motion for a protective order to prohibit the disclosure of and the use of an internal company document.  Sherwin-Williams argues that the disclosure of that document would offend both the attorney-client privilege and the work-product doctrine.  Not surprisingly, the state maintains that the document is not privileged in any way and, therefore, it is not protected from disclosure.  After reviewing the record, the Court held that Sherwin-Williams met its burden of establishing that the internal company document was factual work product, and that the state failed to meet its burden of establishing that the protected document nevertheless was discoverable because of substantial need and a resulting injustice or undue hardship.  The Court also concluded that Sherwin-Williams did not waive the protection afforded by the work-product doctrine.  Because the Court held that the internal document was shielded from discovery based on the work-product doctrine and that this protection was not waived, it did not reach the claim of attorney-client privilege.

Accordingly, the Court vacated the order of the Superior Court denying Sherwin-Williams’ motion for a protective order and remanded the case to the Superior Court.
In the opinion's introduction, the court quotes from Macbeth, Act V, Scene 5 ("To-morrow, and to-morrow, and to-morrow, Creeps in this petty pace from day to day") and laments:  "In a case whose life begins to rival the age of the biblical Methusalah, we are confronted with another anfractuous dispute among the warring parties." (Mike Frisch)

May 13, 2013 in Current Affairs, Privilege | Permalink | Comments (0) | TrackBack (0)

Monday, January 28, 2013

Redistricting Consultations Privileged in North Carolina

The North Carolina Supreme Court has held that the consultations between members of the General Assembly and lawyers employed by the Attorney General and two outside law firms (Ogletree Dinkins and Jones Day) in matters involving redistricting plans are protected by the attorney-client privilege.

Justice Jackson, for the majority, concluded that the General Assembly did not intend to waive privilege in such matters:

..we are unwilling to infer such a sweeping waiver unless the General Assembly leaves no doubt about its intentions.

Justice Hudson dissented, and noted that the enactment at issue stripped confidentiality from redistricting law. Without confidentiality, there can be no privilege:

Defendants seek to protect much of their legislative redistricting work from public scrutiny under the cloak of the attorney-client privilege; however, the statutory language could not be clearer in indicating that the privilege is inapplicable here, making waiver irrelevant.

(Mike Frisch)

January 28, 2013 in Privilege | Permalink | Comments (0) | TrackBack (0)

Tuesday, January 8, 2013

Law Firm Invoices For Representing County Are Public Records

In a matter in which a county was represented in litigation by a law firm pursuant to an insurance contract, a majority of the Wisconsin Supreme Court has held that the law firm's invoices are public records subject to disclosure:

Because the liability insurance policy is the basis for the tripartite relationship between the County, the insurance company, and the law firm and is the basis for an attorney-client relationship between the law firm and the County, we conclude that the invoices that were produced or collected during the course of the law firm's representation of the County pursuant to the liability insurance policy come under the liability insurance policy.  Wisconsin Stat. § 19.36(3) therefor governs the accessibility of the invoices...

The invoices——the billings for the law firm's legal work performed as the County's defense counsel and the insurance company's retained counsel——were produced or collected in the course of the law firm's representation of the County and the insurance company under the liability insurance policy between the County and the insurance company.  Because the liability insurance policy is the basis for the tripartite relationship between the County, the insurance company, and the law firm, and is the basis for an attorney-client relationship between the law firm and the County, we conclude that the invoices were produced or collected during the course of the law firm's representation of the County and the insurance company pursuant to the liability insurance policy; the liability insurance policy is a contract entered into by
the County and the insurance company. Thus, the requirements of Wis. Stat. § 19.36(3) have been met and § 19.36(3) governs the accessibility of the invoices.

There are several dissents, including this from the dissent of Justice Prosser:

The majority opinion permits Wisconsin's public records law to breach privileged communications, contrary to sound public policy and the text of the public records statute.  The majority's assurance that the opinion "does not alter the rules governing confidentiality, attorney-client privilege, or lawyers' work product, or any other rules protecting against disclosure," majority op., ¶15, is unpersuasive given the opinion's analysis and its other declarations.  Because I believe the opinion has serious negative ramifications for the practice of law, I respectfully dissent...

The stakes in this dispute are obvious.  The Star-Times already has information on the names of the County's lawyers, the number of hours they worked, and the amount they were paid——not by the County with County tax dollars, but by the County's insurer.  What the Star-Times wants are "detailed descriptions of the nature of the legal services rendered" and "the substance of [the] lawyer-client communications." 

Any court that determines that these matters of substance are not present in the subject invoices must be prepared to rule that the circuit court's findings were clearly erroneous.

Deciding this case without discussing the lawyer-client privilege in relation to the limiting language of the public records law (in Wis. Stat. §§ 19.31, 19.35(1), 19.36(1), and 19.85(1)(g)) casts a dark shadow over the lawyer-client privilege and other privileges in Chapter 905.  

 
An appellate court should reduce uncertainty, not magnify it.  The likely result of this case will be to force changes in billing practice.  In the future, legal invoices related to an "authority" may be sanitized so that they provide insurers and public entity clients with no information except the hours worked and the amount owed as well as an invitation to discuss the details orally.

The suit was brought the Star-Times. (Mike Rrisch)

January 8, 2013 in Privilege | Permalink | Comments (0) | TrackBack (0)