Court Rejects Privilege for Emails of Attorney Claims Specialist 1

The USDC for the District of Connecticut rejected an insurance company’s claim that the attorney–client privilege protects emails by and with its claims specialist prior to a coverage decision.  And the court rendered this decision even though the claims specialist is an attorney.  Mehta v. Ace American Ins. Co., 2013 WL 3105215 (D. Conn. June 18, 2013).

In Mehta,complianceofficer the plaintiff filed a claim against Ace American Insurance alleging that it breached its uninsured motorist policy by failing to pay a fatality claim.  The plaintiff filed a motion to compel when Ace refused to produce emails “by and with [its] claims specialist, an attorney, prior to the coverage decision.”

In this diversity case, the court correctly applied Connecticut’s state privilege law as required by Federal Rule of Evidence 501.  For a detailed review of the conflict-of-law rules for evidentiary privileges, including the rules for federal and state conflicts and state and state conflicts, see my Conflict of Laws article here.

The Mehta court granted the motion to compel, stating that “an insurance company may not insulate itself from discovery by hiring an attorney to conduct ordinary claims investigations.”  The court held that the attorney–client privilege does not apply to attorneys acting as claims adjusters, claims process supervisors, or claims investigation monitors rather than as legal advisors.  The court drew a clear distinction between insurance documents representing “truly confidential inquiries or responses to counsel concerning legal advice” and insurance claims investigations.

PoP Analysis.  The court followed the narrow privilege interpretation that many courts apply when analyzing insurance claims adjusters.  The attorney–client privilege protects communications to and from attorneys, but only when made for the purpose of rendering legal advice.  Courts often view claims adjusters, particularly in coverage cases, as conducting factual investigations that other lawyers in the company will use to complete a legal evaluation.  When attorneys act something other than an attorney, her communications simply are not privileged.

My thanks to Hartford lawyer Michael T. McCormack of the Hinckley Allen firm for alerting me to this informative ruling.

Court Limits Attorney–Client Privilege for Client Identities

The question whether the attorney–client privilege protects client identities from compelled disclosure reached the Pennsylvania Supreme Court in Levy v. Senate of Pennsylvania, 65 A.3d 361 (Pa. 2013).  The Court restatedconsultant the general rule that the privilege does not protect client identities, but, in a break from other jurisdictions, limited the exceptions to this rule.

General Rule: Privilege Does Not Cover Client Identity

In Levy, a journalist sought certain documents under Pennsylvania’s Right-to-Know Law regarding the outside legal representation of state Senate Democratic Caucus employees.  The Senate produced some documents, but redacted certain information that identified the clients represented by outside lawyers, claiming that the attorney–client privilege protects this information.  The Court, however, reiterated the general rule that the privilege does not protect client identities because “the identity of the client is rarely relevant to the legal advice sought” and because “the identity of the client is a prerequisite to the existence of the privilege.”

Three General Exceptions

The Court noted that other jurisdictions recognize three exceptions to the general non-privilege rule: (1) confidential communications exception; (2) legal advice exception; and (3) last link exception.

The first two exceptions overlap, providing that the privilege applies where disclosure of the client’s identity would reveal information otherwise protected by the privilege.  These exceptions apply to the factual scenario where the attorney and client previously exchanged privileged information and the opposing party is unaware of the client’s identity.  In this situation, disclosure of the client’s identity amounts to full disclosure of privileged information.

The “last link” exception focuses not on confidentiality or legal advice, but rather on the potential negative consequences that would result from revealing the client’s identity.  The Court described the “last link” exception as applying “where the disclosure of the client’s identity by his attorney would have supplied the last link in an existing chain of incriminating evidence likely to lead to the client’s indictment.” (quoting In re Grand Jury Proceedings (Pavlick), 680 F.2d 1026, 1027 (CTA5 1982)).

Levy Court Limits Exceptions

The Levy Court held that the attorney–client privilege applies where divulging the client’s identity would disclose either the legal advice given or the confidential communications exchanged.  These exceptions to the general rule that the privilege does not cover client identities apply in civil and criminal cases and require a case-by-case, “specific determination” whether revealing the client’s identity will expose otherwise privileged information.

The Court rejected the “last link” exception.  It held that this exception does not focus on the revelation of confidential communications or legal advice—the basic protections the privilege provides.

PoP Analysis

The Levy Court properly restated the general rule that the privilege does not protect client identities from disclosure except where disclosure would reveal confidential communications or legal advice.  The Levy Court, however, broke from several jurisdictions that recognize the so-called “last link” exception.  For an example of cases recognizing the “last link” exception (even if not applied to the facts), see Dean v. Dean, 607 So. 2d 494 (Fla. Dist. Ct. App. 1992); In re Witness-Attorney Before Grand Jury No. 83-1, 613 F. Supp. 394 (S.D. Fla. 1984); In re Grand Jury Matter No. 91-01386, 969 F.2d 995 (CTA11 1992); In re Grand Jury Subpoena, Peek, 682 F. Supp. 1552 (M.D. Ga. 1987). The question becomes whether the Levy decision will remain a minority position or serve as the start of a trend limiting or excluding the “last link” exception.

No Committee of One: Court Rejects Privilege for Peer Review Conducted by Lone Physician 1

A Connecticut court rejected a peer-review privilege claim because a solo physician conducted the peer review rather than a “medical review committee.”  And this ruling came despite the fact that the hospital’s bylaws defined “medical review committee” to include a single physician.  Cox v. Reyes–D’Arcy, 2013 WL 2451303 (Conn. Super. Ct. May 15, 2013).

The Cox ruling represents an extremely narrow and strict reading of Connecticut’s peer review statute.  That statute protects as privileged the proceedings of a “medical review committee conducting a peer review.”  Conn. Gen. Stat. §19a–17b(ddoctorwithpatientfolder).  And the statute defines “medical review committee” as including “a committee of any health care institution established pursuant to written bylaws.”  Id.

Following allegations that a pathologist at a New London hospital failed to answer an urgent call to read a blood smear slide, the hospital’s Pathology Department Chair conducted a peer review investigation.  The hospital’s bylaws provided that its medical review committee included a department chair acting in a peer review function.  In subsequent litigation, the pathologist sought in discovery the peer review findings.  The hospital objected citing Connecticut’ peer review privilege.

The court ruled that, as with any privilege claim, it must narrowly construe the peer review privilege statute. And in doing so, it defined the statute’s phrase “medical review committee” as a “group of people delegated to perform a particular task.”  And because the Department Chair conducted the peer review solo, rather than as part of a “group,” the court held that no “medical review committee” existed to which the privilege applied.

This narrow interpretation came even though the statute defines a “medical review committee” as one established pursuant to hospital bylaws and the hospital here defined the committee as including a lone department chair.  To this, the court found that the bylaws “overreach the privilege.”

PoP Analysis.  Evidentiary privileges run counter to the maxim, first coined in 1742 by Lord Chancellor Hardwicke, that the public has a right to “every man’s evidence.”  Thus, the Cox decision presents another example of courts narrowly construing evidentiary privileges.  Knowing this tendency, the practical lesson here is that health care providers and institutions that engage in peer review proceedings must ensure that the bodies created to conduct the proceedings match precisely the peer-review statute’s wording.  Perhaps it is time for a triage of your state’s peer review statute and your healthcare client’s peer review procedures?