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?

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.