Article Challenges Basis for Business Negotiations Exception to Subject-Matter Waiver Doctrine 1

Courts are increasingly addressing whether the subject-matter waiver doctrine applies to disclosure of privileged communications in a non-litigation setting, such as disclosures made during business negotiations.  In an influential decision in November 2012, the Illinois Supreme Court ruled that the subject-matter waiver doctrine does not apply in extrajudicial settings.  PoP profiled that decision, Center Partners LTD v. Growth Head GP, LLC, in an earlier post.

Courts refusing to apply the subject-matter waiver doctrine to extrajudicial settings such as business negotiations often cite the fear of a perverse incentive: parties will foregoimwinkelried having their lawyers at the negotiating table for fear that their inclusion will later result in wholesale disclosure of privileged information.  Indeed, the Center Partners court, citing a First Circuit decision, based its decision, in part, on this theory.

But in a recent article in the Duquesne Law Review, noted privilege expert Professor Edward J. Imwinkelried challenges this theory, stating that, “[i]n truth, that prediction is a gross exaggeration, reflecting misconceptions about both the negotiation process and privilege law.”  Professor Imwinkelried argues that the subject matter waiver doctrine will not cause parties to leave their lawyers behind when they approach the bargaining table; rather, there is a greater risk of waiver if lawyers are absent. The article, accessible here, is Protecting the Attorney–Client Privilege in Business Negotiations: Would the Application of the Subject-Matter Waiver Doctrine Really Drive Attorneys from the Bargaining Table?, 51 Duq. L. Rev. 167 (2013).

Professor Imwinkelried posits that the risk of waiver increases if business professionals cut their lawyers from the negotiating process because the business professionals will try to explain the legal basis for a particular position.  And because the legal basis necessarily comes from communications with the company’s lawyers, the business professionals’ explaining a legal basis for a position is tantamount to disclosing privileged communications.  By contrast, when lawyers explain a legal basis for a position, that explanation derives from legal research and analysis, and not from privileged communications with the client.

Professor Imwinkelried concludes as “plainly wrong” that application of the subject-matter waiver doctrine to business negotiations will prompt clients to remove lawyers from the negotiating table.  And he argues that, if there is a subject-matter waiver rule, then it should apply to business negotiations as well as litigation.

The issue of subject-matter waiver in the extrajudicial context continues to develop.  Professor Imwinkelried’s article lends another voice to this ripening debate, and lawyers involved in a subject-matter waiver battle as in Center Partners should take notice.

My thanks to Professor Imwinkelried and the Duquesne Law Review for permission to reprint the article in this post.

State of the Law: Federal Judicial Deliberation Privilege

Many assume that a federal common-law or constitution-based judicial deliberation privilege protects a federal judge’s deliberations, including the judge’s communications with her law clerks, from compelled discovery.  This assumption is probably correct, but there is a dearth of law on the privilege and particularly its scope and limitations.  This post provides an overview of the current state of the law concerning the federal judicial deliberation privilege.

In various opinions dealing with President Nixon’s executive privilege claims, the United States Supreme Court and the D.C. Circuit Court of Appeals compared, in dicta, the executive privilege to the judicial deliberation privilege.Judge, law book and gavel  See Nixon v. Sirica, 487 F.2d 700, 717 (D.C. Cir. 1973) (“This privilege, intended to protect the effectiveness of the executive decision-making process, is analogous . . . to that among judges, and between judges and their law clerks.”).  But the courts did not fully explain the basis for any judicial deliberation privilege, stating simply that the privilege’s source is “rooted in history” and buttressed by “the constitutional separation of powers of three departments of government.” Id. at 740 (MacKinnon, J.  dissenting).

A decade later, the 11th Circuit Court of Appeals became the first, and only, federal court to formally adopt a judicial deliberation privilege. In Williams v. Mercer, 783 F.2d 1488 (11th Cir. 1986), a case involving the 11th Circuit’s investigation of now-former federal judge Alcee Hastings, the court ruled that “there exists a privilege . . . protecting confidential communications among judges and their staffs in the performance of their judicial duties.”  Id. at 1520.  The court ruled, however, that the privilege is qualified, not absolute, meaning that a party seeking disclosure of judicial communications may overcome the privilege upon a showing of a “demonstrated need.”  Id.

The party seeking the information may prove a “demonstrated need” for judicial communications by showing the importance of the inquiry for which the information is sought, the relevance of the information to the inquiry at issue, and the difficulty of obtaining the information from alternative means.  Upon this showing, the court must then weigh the party’s demonstrated need for judicial communications against the degree of intrusion upon the privileged information.

The 11th Circuit’s decision that the federal judicial deliberation privilege is qualified conflicts with state-court decisions holding that the privilege is absolute, meaning that, once established, the party seeking the judicial information may not overcome it.  In 2012, Massachusetts became the latest state to adopt an absolute judicial deliberation privilege, a decision profiled in an earlier post.  Moreover, the 11th Circuit’s decision came 10 years before the Supreme Court’s decision in Jaffee v. Redmond, 518 U.S. 1 (1996), where the Court provided an outline for the adoption of new common-law evidentiary privileges.  One Jaffee guideline suggests reviewing whether states have adopted the privilege; and all states that have considered the issue decided to adopt an absolute judicial deliberation privilege.

So, when would the judicial privilege arise? Some possibilities include legislative subpoenas to judges, judicial misconduct proceedings, civil or post-conviction litigation where the judge is subpoenaed to obtain the basis of prior rulings, subpoenas issued to law clerks, and subpoenas issued to judges in support of a lawyer defending a legal malpractice action.  When faced with a scenario where a party subpoenas a judge or her law clerks to testify about deliberative communications, practitioners should consider arguing that the 11th Circuit’s decision adopting a qualified privilege misses the mark, and that the federal court should follow the states’ lead and adopt an absolute judicial deliberation privilege.  And arguing that Jaffee changed the equation 10 years after Williams is perhaps the best start toward accomplishing that goal.

Informative Ruling on Priest-Penitent Privilege

The Massachusetts Appeals Court refused to apply the state’s priest-penitent privilege where the criminal defendant’s conversations with a Baptist minister did not concern spiritual advice.  Consequently, the court permitted the minister’s testimony about the defendant’s admission of child sexual abuse.  Commonwealth v. Vital, 2013 WL 2350393 (Mass. App. Ct. May 31, 2013).

Massachusetts, like many states,Fotosearch_1775298 contains a statutory priest-penitent privilege.  Mass. Gen. Laws  c. 233 § 20A.  Also called the clergy-communicant privilege, the “minister’s privilege,” or the cleric-confessor privilege, this evidentiary privilege generally protects from compelled disclosure a person’s communications—not just confessions—to her priest, pastor, rabbi, or other minister.  Most statutes, however, protect only communications made for the purpose of seeking spiritual or religious advice or comfort.

In Vital, the defendant met with his Baptist minister about his sexual assault of an underage girl.  According to the minister, the defendant’s stated purpose for the discussions was to persuade the minister to talk with the girl’s family in the hopes of avoiding criminal prosecution.  Although the defendant confirmed the privileged and confidential nature of the discussions with the minister before confiding admissions, the appellate court found that the privilege simply did not apply to the conversations.

The defendant in this case . . . did not communicate with the pastor to seek religious counseling, but rather sought the pastor’s assistance in an attempt to avoid the proverbial ‘train going right at the defendant’s forehead, i.e., criminal charges’.

The court strictly construed the priest-penitent privilege statute, found that it did not cover these communications, and permitted the minister to convey the defendant’s confession of guilt to the jury.

PoP Analysis.  Several states maintain priest-penitent privilege statutes similar to the Massachusetts’ statute.  Applicable in criminal and civil cases, the privilege encourages individuals to seek spiritual or religious therapy, if desired, by removing the fear that a court may later force the minister to disclose statements made during a spiritual discussion.  But as in Vital, courts strictly construe the statute.  Vital reminds practitioners to, where possible, lay a foundation that the communicant’s discussions with a clergy member were made for the purpose of seeking religious or spiritual advice within the confines that religious discipline. Only after laying this foundation will courts apply the privilege and prevent disclosure.