Privileged Communications With Corporate Clients
Maintaining attorney-client communications where a corporation is the client can be a sensitive area. To whom, within the corporation, can communications be made without waiving the privilege? Is the communication for business purposes or for legal purposes? What if there are mixed purposes? Business litigators often have to confront these and other issues in their daily practice. The issues can be complicated even more by the fact that many current communications occur in the context of string e-mail exchanges.
The Eastern District of Pennsylvania recently issued a decision that very succinctly reminds us of the applicable principles and applies them to e-mail chains and draft legal documents in the case at hand. See SEPTA v. CaremarkPCS Health, L.P., No. 07-2919, 254 F.R.D. 253 (E.D. Pa. Dec. 9, 2008).
In that decision, involving a discovery battle between two corporations over documents, the Court reminds us of the following principles of law relating to the attorney-client privilege:
- Pennsylvania courts have applied the privilege to communications from client to attorney and also to communications from attorney to client when the communications reflect the client-to-attorney communications. Some courts have gone so far as to say that an entire conversation between an attorney and a client to secure legal advice is privileged, regardless of who is speaking.
- Even if a communication addresses business concerns, the communication is privileged if the business concerns were infused with legal concerns and the business decision was reached based on legal advice.
- Privileged communications remain privileged if they are disseminated only to corporate employees or officers on a need-to-know basis.
- Documents are privileged even if they are not labeled as “privileged”, so long as the context makes it clear that the privilege applies.
- Draft documents prepared by legal counsel or sent to legal counsel for legal comment generally are privileged because they may reflect client confidences or legal advice or opinions.
- When the client is a corporation, privileged communications can be shared with non-attorney employees for the purpose of relaying information that attorneys requested or for the purpose of disseminating legal advice to appropriate business people.
- Sometimes, in-house counsel acts as a business advisor in addition to a legal advisor. However, if a communication with in-house counsel was primarily for the purpose of securing legal advice, the communication is privileged even if business concerns were raised in the communication. Resulting discussions also are privileged if they are based on or reflect the legal advice obtained.
- A communication is not privileged merely because an attorney is “cc’d” on it. However, if the attorney is copied to keep the attorney informed of information or status needed to render legal advice and that is the primary purpose of the communication, the communication is privileged.
This decision is helpful to business litigators in that it accurately reflects how decisions are made within modern corporations. Typically, there are several businesspeople involved with major decisions, and businesspeople and corporate lawyers (in-house and/or outside counsel) weigh-in on business issues and legal issues at the same time. The decision is a good example of the law keeping up with business realities.
