In a matter not previously addressed by the 7th Circuit, the USDC NDILL followed then-Judge Kavanaugh’s standard for assessing whether the attorney–client privilege protects an in-house lawyer’s emails that pertain to legal and non-legal matters. The district court ruled that the privilege applies when “one” of the communication’s “significant purposes” was to obtain or provide legal advice. Smith–Brown v. Ulta Beauty, Inc., 2019 WL 2644243 (NDILL June 27, 2019). You may read the opinion here.

Used Cosmetics?

Ulta Beauty, one of the country’s fastest growing retail stores, suffered a PR hit—and later lawsuits—after alleged former employees took to Twitter and other social-media outlets claiming that UB resells returned cosmetic products as “new.” You may read about the allegations, complete with copies of various tweets, in the Complaint or in this ABC news story.

UB’s General Counsel immediately began an investigation, and communicated with various UB departments and employees to accomplish the task. In a class-action lawsuit that predictably followed, the plaintiffs sought production of several emails related to the investigation, claiming they were for public-relations, not legal, purposes.

The GC’s Declaration

UB did not, as other companies have unsuccessfully tried, simply submit the emails for in camera review with conclusory statements that the privilege clearly applies. Rather, UB’s General Counsel submitted a detailed declaration explaining the origins and reasons for the investigation and why each challenged email or document related to legal advice. You may read—and learn from—the declaration here.

Dual-Purpose Standard

Claiming that the investigation-related emails pertained to marketing or PR concerns, the class plaintiff argued that UB must prove that “the primary purpose” (with an emphasis on “the”) of each email was to render or solicit legal advice. The problem was that neither the plaintiff nor the court could find a 7th Circuit case applying this somewhat narrow standard.

Looking elsewhere for guidance, the court landed on then-Judge Kavanaugh’s opinion in In re Kellogg Brown & Root, 756 F.3d 754 (DC Cir. 2014), which I discussed in this post and this one. The KBR Court eschewed a “the primary purpose” standard, noting that “trying to find the one primary purpose for a communication motivated by two sometimes overlapping purposes (one legal and one business, for example) can be an inherently impossible task.”

Instead, the more practical and precise test is this: “Was obtaining or providing legal advice a primary purpose of the communication, meaning one of the significant purposes of the communication?” Judge Kavanaugh reinforced this standard in his last D.C. Circuit opinion before joining the Supreme Court, which may read about here.

The Ulta Beauty court found this standard “persuasive,” and applied it to the challenged emails. Upon a review of the emails under this standard’s microscope, along with the UB GC’s well-written declaration, the court found that the privilege protected from disclosure UB’s internal-investigation emails.

 

 

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Who knew? A personal-injury plaintiff’s firm apparently has a “cozy agreement” with certain treating physicians under which the lawyer refers injured clients to the doctors for evaluation and (almost certainly?) treatment, with the doctor receiving payment from the settlement proceeds.

And when a defense lawyer makes that coziness the focal point of trial, the question arises whether the privilege protects this financial relationship from discovery and admissibility. A Florida appellate court said yes, because the relationship’s disclosure would reveal client communications. Bellezza v. Menendez, 273 So. 3d 11 (Fla. App. Ct. 2019). You may read the decision here.

The Barn

A law firm’s long-time employee, driving the firm’s car, struck a pedestrian walking a bike. The pedestrian visited a plaintiff’s lawyer who referred him to an orthopedist. The doctor identified a need for neck surgery, operated, and charged the plaintiff $184K in medical expenses.

As it turns out, this isn’t the first referral relationship between this plaintiff’s lawyer and this orthopedist, and defense counsel sought to exploit it.

Out of the Barn?

The trial court allowed the defendant to obtain “information regarding the financial relationship between the plaintiff’s attorney and his treating physicians.” After that ruling, the Florida Supreme Court opined that the attorney–client privilege protects from discovery (1) whether the plaintiff’s lawyer referred the plaintiff to a particular physician and (2) agreements between a law firm and treating physicians. Worley v. Central Fla. Young Men’s Christian Ass’n, 228 So. 3d 18 (Fla. 2017). You may read that decision here.

At trial, plaintiff moved in limine to preclude evidence of his lawyer’s financial relationship with his orthopedist and other physicians, citing Worley. The trial court again refused to preclude the evidence and forced plaintiff’s counsel to testify, noting that the “horse has left the barn.”

Hold your horses, the appellate court said.

In the Barn

While the defendant argued that Worley’s holding is limited, the appellate court disagreed and applied Worley’s privilege language. The court permitted the discovery—and trial use—of the plaintiff’s lawyer’s letter of protection with the treating doctor to establish bias. Those letters—essentially liens on settlement and judgments—can demonstrate that the physician has an interest in the litigation’s outcome.

The privilege, however, protects all other questions “regarding the ‘cozy agreement’ between a law firm and a treating physician.” While the Bellezza court did not elaborate, one can surmise that, reading Worley, the information exchanged between plaintiff’s counsel and his lawyer reveals the client’s communications to the lawyer.

Epilogue

The defendant law firm filed a petition for review to the Florida Supreme Court. The appeal request focuses on forcing a plaintiff’s counsel to testify about her financial relationship with treating physicians. You may read the petitioner’s brief here, and the answering brief here.

But the privilege issue is the appeal’s heart, and we’ll see if the Supreme Court elects to review whether the privilege horse remains in the barn or gallops away.

 

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Although Bill Cosby—currently serving a 3–10 year prison sentence following a sexual-assault conviction—has bigger problems, a California appellate court added to his troubles.

In a former model’s defamation case against the comedian-turned-prisoner, the Court rejected Cosby’s anti-SLAPP motion because the attorney–client privilege did not automatically protect meeting discussions between Cosby and his lawyer.

The privilege hole was his lack of proving that the meeting was confidential. Dickinson v. Cosby, 2019 WL 3369427 (Cal. Ct. App. July 26. 2019). You may read the decision here.

An Interview and a Response

Despite writing in her memoir that she never entered Cosby’s Lake Tahoe hotel room in 1982, former actor and model Janice Dickinson claimed in a November 2014 Entertainment Tonight interview, which you may watch here, that Cosby drugged and raped her on that night.

In response, Cosby’s then-attorney, Martin Singer, issued three press releases. The first said that Dickinson’s ET claim is a “fabricated lie.” (Is there any other kind?). The other two generally refuted sexual-assault claims raised by other women but did not mention Dickinson.

Cosby did not issue the press releases—his lawyer did.

Lawyer–Client Meeting

Singer claimed, in a declaration you may read here, that he met with Cosby and Cosby’s transaction attorney prior to issuing the press release. The privilege, however, prevented him from disclosing those communications.

Note what Singer did not explicitly say—that no one else was present in the meeting.

Defamation Suit and Anti-SLAPP Motion

Dickinson filed a defamation suit over the press releases, and Cosby filed a motion to strike the complaint under California’s anti-SLAPP statute, Cal. Code Civ. Proc. § 425.16. The motion shifted the burden to Dickinson to prove that she had a probability of prevailing on the merits.

Privilege Ruling—Don’t Break out the Pudding Pops

Cosby argued that his attorney—Singer—made the allegedly defamatory press releases and that Dickinson could not prove Cosby authorized it. The privilege, Cosby claimed, precluded Dickinson from inquiring into the conversation that Singer held with Cosby and Cosby’s transaction attorney.

The Court, however, found a hole in this argument. It said that the privilege fails if Cosby’s non-lawyer publicist, David Brokaw, was present during the conversation. Singer said that Cosby and the transaction lawyer were present, mentioning no one else. So why doesn’t that establish confidentiality and, therefore, the privilege?

The Court said that Singer did not “specify whether other people, such as Brokaw, were present during those conversations.” Dickinson, therefore, can perhaps pierce the privilege due to a lack of confidentiality and use Cosby’s conversation with Singer to prove that Cosby authorized the allegedly defamatory press releases.

Wow. One additional sentence in Singer’s declaration—such as “no one else was present”—may have allowed Cosby to crack open a pudding pop and enjoy a victory.

Settlement

It appears that Cosby’s insurer, AIG, over Cosby’s objections, settled Dickinson’s defamation case on July 25, 2019—one day before the appellate court issued its opinion. Was this ruling, then, even necessary?

POP Analysis

The take-aways from this are two-fold. First, issuing a defamatory statement through one’s attorney is not a lawsuit-insulator.

Second, the concept of confidentiality is just as crucial to the attorney–client privilege as the legal-advice component. To prove the privilege, one must establish an attorney–client relationship and a communication between the lawyer and client that was confidential when made—and kept confidential thereafter. Singer’s declaration failed to establish the confidentiality component, and that was fatal to Cosby’s anti-SLAPP motion.

By the way, whatever happened to Jell-O Pudding Pops? According to Culinary Lore, they are no longer in production and lost to history.

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The Georgia Court of Appeals issued a privilege opinion with significant public-policy considerations. The Court held that a healthcare provider may assert a dead patient’s mental-health privilege to preclude evidence of the patient’s communications to the provider.

This is true even in a malpractice claim against the provider where the patient’s mental health is at issue. And the decedent’s personal representative—his family—can do nothing about it. Advantage Behavioral Health Sys. v. Cleveland, 2019 WL 2497611 (Ga. Ct. App. June 17, 2019). You may read the decision here.

A Sad Tale

Nicholas Cleveland entered the Athens Regional Medical Center on March 29, 2016, and was dead three days later. He presented with suicidal thoughts and bipolar disorder, among other things, and the ER doctor involuntarily committed him to a mental-health facility, Vantage Point, operated by Advantage Behavioral Health System. The facility discharged Cleveland on April 1, and he committed suicide a few short hours later.

The following month, Cleveland’s family requested his mental-health records, and Advantage produced all of them. No redaction. No privilege assertion. Nada.

Malpractice Suit

A year later, Cleveland’s parents filed a wrongful-death suit against Advantage, asserting a professional-negligence claim because Advantage allegedly failed to properly evaluate Cleveland’s suicide risk and improperly discharged him. Even though it provided the family with Cleveland’s records, Advantage sought a protective order precluding their admission at trial under Georgia’s mental-health privilege, O.C.G.A. § 24-5-501.

Standing

The trial court said that Advantage had no standing to assert Cleveland’s mental-health privilege, but the appellate court reversed. Relying almost exclusively on the Georgia Supreme Court’s decision in Cooksey v. Landry, 761 S.E2d 61 (Ga. 2014), available here, the appellate court said that the privilege’s purpose is to encourage the patient to speak freely with her provider “without fear of disclosure or embarrassment.”

The privilege belongs to the patient and, “in the absence of a waiver by the patient, privileged material is neither discoverable nor admissible at trial.” And even though the patient owns the privilege, “nothing precludes” a healthcare provider “from asserting the privilege.”

The Court held that prohibiting a healthcare provider from asserting the deceased patient’s privilege—even where it is allegedly at fault—“would contravene the privilege’s purpose.”

No Waiver?

In fact, the purpose is apparently so impenetrable that the Court rejected any argument that Advantage’s previous release of the privilege information waived the privilege. Nor does “at-issue waiver” come into play because the privilege is “nearly absolute.”

What about the Family?

Does privilege pass to the patient’s family or personal representative? No, because the privilege—and its purpose—survives death, and a Georgia statute, O.C.G.A. § 37-3-166, does not permit the release of privileged information contained in a deceased patient’s medical records. So, the personal representative never takes possession of the privilege and cannot waive it.

POP Analysis

So, a patient dies–allegedly at the hands of a healthcare provider–but cannot waive the privilege and admit into evidence his conversations with the provider—because he is dead? What is the patient, or his family, to do? Is there such a thing as a pre-admission privilege waiver? Should all patients amend their wills pre-admission to include a privilege-waiver provision?

If this decision bothers you, then perhaps the culprit is the Cooksey decision and the statutes it interpreted. The Cooksey Court ruled that the mental-health privilege belongs solely to the patient, survives death, and only the patient can waive it. There is no at-issue waiver and the patient’s personal representative has no control over it.

The Court said the mental-health privilege is “nearly absolute,” rather than “absolute.” I wonder if this wording opens the door to a different interpretation in a different case.

It is true that only a strongly and consistently enforced mental-health privilege implements the public-policy goal of encouraging patients to provide candid and complete information to their healthcare providers. But a patient also has the ability to forego that privilege protection, and public policy also encourages wronged individuals to seek redress against tortfeasors.

This public-policy balancing is difficult, but Georgia courts fall on the side of privilege protection. At least for now.

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Courts understand.  Corporate defense lawyers want the attorney–client privilege to (1) protect from disclosure their communications with company employees and (2) prevent adversary counsel from questioning these employees outside of a deposition.

Courts understand. Adversary lawyers want to interview—ex parte—company employees who possess relevant information so defense counsel’s presence does not inhibit the employees’ candor.

So, how do lawyers reconcile these competing interests in a way that complies with ethical requirements and secures the most privilege protection? Should company counsel also represent the employee—personally—so adversary counsel cannot conduct ex parte interviews?  Is an attorney–client relationship with the employee necessary to secure privilege protection? May corporate counsel form an attorney–client relationship to prevent ex parte interviews without violating Model Rule 3.4, which prevents a lawyer from obstructing another party’s access to evidence?

One court has answered. In Newsuan v. Republic Servs., Inc., 2019 WL 2528793 (Pa. Super. Ct. June 20, 2019), the court ruled that, absent a conflict waiver, a company’s lawyer may not personally represent the company’s employees. And absent personal representation, adversary counsel may interview employees ex parte; otherwise, the representation unethically obstructs adversary counsel’s access to evidence.

The company’s privilege, however, is sufficient to protect the lawyer’s employee interviews. Read the opinion here.  Actually, read it twice.

Personal Representation of Corporate Employees

A front-end loader crushed Karen Newsaun’s leg in an accident at a recycling center. She sued Republic Services and asked Republic to disclose the name of 16 employees who were at the worksite when the accident occurred. Republic refused.

Republic’s lawyers announced that they also represented the employees, and that this representation and Model Rule 4.2 prevented Newsaun’s lawyer from interviewing them ex parte. But the lawyers did not inform the employees of a potential conflict of interest in representing them and their employer. Under Model Rule 1.7, lawyers must disclose a conflict associated with concurrent representation and obtain a waiver before proceeding with the representation.

The Newsaun Court rejected this interview-blocking attempt, stating that—

[O]nly upon the employee’s informed consent to retain counsel despite the risk of conflict, which consent is accomplished through the employee’s completion of a waiver form clearly notifying him or her of the conflict, is a valid attorney–client relationship formed.

The Court refused to recognize any attorney–client relationship between the company’s lawyer and the company employees.

Corporate Attorney–Client Privilege

The Court held, however, that the lack of a specific attorney–client relationship did not destroy the privilege. Applying the corporate attorney–client privilege adopted in Upjohn Co. v. United States, 449 U.S. 383 (1981), the court held that the privilege protects company counsel’s communications with employees. It is the company’s privilege that applies, not the employee’s privilege. Indeed, the employees had no reason to seek legal advice about Newsaun’s injury.

Former Employees?

Some of these employees/witnesses were now former employees. But no matter, the court said. It held that the privilege still applies, contrary to a Washington Supreme Court’s opposite ruling, which you may review here.

Upjohn Warnings Required?

The court noted that company counsel’s failure to give the employees Upjohn warnings before interviewing them did not destroy the privilege. Relying on the Commonwealth v. Schultz, 133 A.3d 294 (Pa. Super. Ct. 2016), a decision analyzed here, the court held that Upjohn warnings were unnecessary because the employees “neither sought legal advice, consulted with corporate counsel regarding personal legal matters, nor had any apparent need for legal representation.”

Company counsel, according to the court, “muddled the relevant attorney–client scheme somewhat by ending the interviews with an offer to represent the employees in their capacities as witnesses.” The totality of circumstances, however, revealed that the employees had sufficient notice that their discussions with company counsel were solely for Republic’s use.

Ex Parte Interviews

Even though the privilege applies, the court held that adversary counsel may conduct ex parte interviews because it invalidated company counsel’s purported attorney–client relationship with the employees.

Take-Aways

The privilege protects from disclosure the company lawyer’s interview with a company employee. It is the company’s privilege. It is not necessary to enter an attorney–client relationship with the employee to establish and secure privilege protection. Note, however, that the privilege does not prevent adversary counsel from talking—ex parte—with the employee.

If company counsel wants to form an attorney–client relationship with the employee, a potential conflict of interest arises and the relationship may go forward only if the employee waives the conflict through informed consent. If the relationship properly forms, then adversary counsel may not conduct ex parte interviews with the employee.

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