The attorney-client privilege, the oldest evidentiary privilege known to the common law, is an exception to one of the main policies behind the paramount rule of evidence that relevant evidence is admissible at trial. In this regard, the attorney-client privilege is an obstruction to the search for the truth. The privilege protects confidential attorney-client communications made for the purposes of obtaining legal advice. While many attorney-client communications are confidential, they are not privileged unless they were made for obtaining legal advice. The attorney-client privilege is designed to facilitate free attorney-client communications without the fear of unwanted disclosure so that clients can receive competent legal advice from their lawyers.
Although its title should be self-evident, in reality, the attorney-client privilege is often perverted by litigators to be strategically used as a sword. The privilege is often abused, particularly in the context of the corporate attorney-client privilege. And the courts in the commonwealth provide very little guidance on addressing potential attorney-client privilege abuse issues. See, e.g., Zack Needles, "Justices Won’t Hear First-Impression Attorney-Client Privilege Issue," The Legal Intelligencer, (April 4, 2019).
The Attorney-Client Privilege 'Ruse'
During a recent deposition where I was examining an adverse party, counsel used an attorney-client privilege “ruse” to preclude my examination of the adverse party. The adverse party, who was a director of the defendant-corporation, testified about his corporation’s business practice. The corporation’s business practice was a material issue in the case. I had a chain of email communication between all directors, including the adverse witness, that directly contradicted the witness’s testimony and supported my theory. Although the email communication involved only the directors (and they were discussing their business practice), counsel asserted the attorney-client privilege over the email chain and instructed the witness not to answer my questions. Apparently, according to counsel, because the email communication involving a business matter was forwarded to the corporate lawyer (and there no evidence showing that the email was forwarded to the corporate lawyer), the entire email chain was “protected” under the attorney-client privilege.
Fortunately, the court disagreed with counsel at a later hearing, finding that the email chain was not privileged. Unfortunately, the attorney-client privilege ruse was not an isolated event. Many litigators, especially those who are representing corporate clients, abuse attorney-client privilege to preclude what is discoverable information, as in, Gillard v. AIG Insurance, 609 Pa. 65, 88 (2011) (noting “the ‘ruse abuse,’ in which ordinary business matters are disguised as relating to legal advice”) (quoting Gregory C. Sisk & Pamela J. Abbate, "The Dynamic Attorney-Client Privilege," 23 GEO. J. LEGAL ETHICS 201, 230–35 (2010)).
There are three frequently used tactics to invoke the attorney-client privilege ruse. First, existing facts are given to a lawyer. Second, a lawyer is invited to a business meeting. Third, a lawyer is copied on business communications. With very limited exceptions, none of the three types of communications are privileged.
Facts Shared With a Lawyer Are Not Privileged
The attorney-client privilege protects only confidential communications between a client and attorney. (Interestingly, until the 2011 Gillard decision, many Pennsylvania courts held that only confidential communications made by a client to her counsel were privileged but that confidential communications made by counsel to client were not privileged.) The attorney-client privilege does not protect any underlying information that exists independently of the attorney-client communication. In other words, the underlying information does not become “privileged” information just because it was given to a lawyer, see Upjohn v. United States, 449 U.S. 383, 385 (1981). The attorney-client privilege does not protect mere facts the client communicates to her lawyer, as in Pennsylvania Department of Education v. Bagwell, 114 A.3d 1113, 1124 (Pa. Cmwlth. 2015) (citing Upjohn). Thus, even if a client shared underlying facts with his lawyer for the purposes of obtaining legal advice, while the client’s communications are privileged, the underlying facts do not become privileged just because they were shared with the lawyer.
Business Discussions Are Not Privileged
Counsel in the example I mentioned above also argued that the email exchange between the adverse party and his fellow directors was privileged because the business discussions contained in the email exchange were gathered by the directors for the purposes of seeking legal advice. The business discussions, even if they were gathered for the purposes of seeking legal advice, are not privileged. The other two frequently used tactics of the attorney-client privilege ruse—a lawyer sits in a business meeting or a lawyer is copied on a business communication—is commonly invoked in the context of the corporate attorney-client setting.
In the corporate attorney-client setting, a lawyer is invited to sit or even participate in a business meeting (such as a directors’ meeting or shareholders’ meeting) or a lawyer is being copied on business communications. The corporation then claims that all communications are privileged because the lawyer either was at the meeting or was copied on the communications. Unless all of the elements of the attorney-client privilege are met—e.g., the confidential communication made for the purposes of obtaining legal advice—neither situation warrants the protection of the attorney-client privilege. A lawyer’s sitting in a business meeting, even if the lawyer participates in the discussions, does not make the discussions privileged simply because of the lawyer’s presence at the meeting. In such a situation, the attorney-client privilege would protect the discussions only if the predominant purpose of the meeting was to obtain legal advice. If, on the other hand, the predominant purpose of the meeting was business discussions, the discussions are not privileged. Even if a business decision can be viewed as both business and legal evaluations, the business aspects of the decision are not protected simply because legal considerations are also involved, as in International Cards v. Mastercard International, (S.D.N.Y. Aug. 27, 2014).
Similarly, where communications (such as emails) “are predominantly business communications sent from one businessperson to other business people, with multiple other business people and one in-house attorney copied in the ‘cc’ field,” the communications are not privileged. “A corporation cannot be permitted to insulate its files from discovery simply by sending a ‘cc’ to in-house counsel.” Communications between business people do not become privileged just because a lawyer is copied on the communications, see Kramer v. Raymond, Civ. No. 90-5026 (E.D. Pa. May 29, 1992). In a communication involving both legal and business matters, the communication will be protected by the attorney-client privilege only if the “communication’s primary purpose is to gain or provide legal assistance.”
The Kramer court makes clear that business communications made “at meetings attended or directed by attorneys are not automatically privileged as a result of the attorney’s presence.” Similarly, the “business communications are not protected merely because they are directed to an attorney.” Rather, for the attorney-client privilege to apply to what would otherwise be business communications, the party seeking to prevent disclosure (i.e., the corporation) “must clearly demonstrate that the communication in question was made for the express purpose of securing legal not business advice,” (quoting AAMCO Transmissions v. Marino, (E.D. Pa. Sept. 24, 1991). Moreover, the party who is seeking to prevent disclosure has the burden to establish clearly that the communication was made for the express purpose of obtaining legal advice. Merely stating that a communication was made at the meeting with a lawyer’s presence, that a communication was shared with a lawyer, or that a communication was made at a lawyer’s instruction is not sufficient to establish the attorney-client privilege, as in Custom Designs & Manufacturing v. Sherwin-Williams, 39 A.3d 372, 376 (Pa. Super. Ct. 2012) (“the party invoking a privilege must initially ‘set forth facts showing that the privilege has been properly invoked.’”). If the party fails to establish clearly that the communication was made for the express purpose of obtaining legal advice, the burden never shifts to the other party to challenge the attorney-client privilege.
Conclusion
The attorney-client privilege is an exception to the general rule that relevant evidence is admissible. Unfortunately, some litigators, especially those who represent corporate parties, use the attorney-client privilege ruse to prevent disclosure of relevant information. Compounding the attorney-client privilege ruse is that the courts in Pennsylvania provide little guidance in addressing the abuse. As a result, some litigators invoke improper attorney-client privilege for communications that are not privileged, especially at depositions leading to the derogation of the search for the truth. Until the Pennsylvania Supreme Court issues clear guidance on invoking the privilege properly—perhaps by issuing a stern warning to those who use the attorney-client privilege ruse—practitioners should prepare to argue and persuade the trial court why the attorney-client privilege does not apply to nonprivileged materials. To do so, practitioners should learn to recognize a ruse in the first place.
Edward T. Kang is the managing member of Kang, Haggerty & Fetbroyt. He devotes the majority of his practice to business litigation and other litigation involving business entities. Conctact him at ekang@khflaw.com.
