This is the second in a two-part series on attorney-client privilege and work product protection.  We did not plan it this way, but our recent This Is Why Board Presentations Are Privileged And Protected blogpost generated a lot of interest, and the Pennsylvania Supreme Court issued an important opinion last week on these topics, so we are going to keep it rolling.  If anything, today’s scenario is even more common in day-to-day practice:  Do attorneys waive attorney-client privilege or work product protection by forwarding attorney communications and/or work production to outside consultants?  The answer is that the privilege and protection can attach, but they can also be waived under rules that everyone should understand.

The case is BouSamra v. Excela Health, No. J-80-2018, 2019 WL 2509384 (Pa. June 18, 2019), which involved a hospital’s investigation of accusations that certain physicians had possibly performed unnecessary surgery.  Id. at *1-*2.  In the midst of the investigation, the hospital’s General Counsel retained a public relations firm to assist in managing the anticipated negative press.  The hospital also retained outside counsel, who communicated by email directly with General Counsel, who then forwarded some of the emails to the PR consultant.  Id. at *2-*3.  Days later, the hospital held a press conference executing a PR plan seemingly affected by outside counsel’s advice, which led to a defamation lawsuit filed 364 days later.  Id. at *3.

Are the forwarded attorney-client communications discoverable?

The Pennsylvania Supreme Court’s answer is a firm maybe; and it all came down to waiver, for which the Court set forth some new rules.  The Court first articulated Pennsylvania’s view of work product protection.  As in most every jurisdiction, a party may not obtain discovery of “mental impressions of a party’s attorney or his or her conclusions, opinions, memoranda, notes or summaries, legal research or legal theories.”  Id. at *7 (citing Pa. R. Civ. P. 4003.3).  The essential purpose of the work product rule is “to keep the files of counsel free from examination by the opponent,” and the protection applies “regardless of whether the work product was prepared in anticipation of litigation.”  Id.  Most notably, the protection does not depend entirely on confidentiality, and an attorney does not necessarily waive it by disclosing work product to a third party.  Id. at *8.

This is the most important part of the opinion.  Whereas disclosure to a non-agent third party will generally waive the attorney-client privilege (more on that below), an attorney waives work product only through disclosure to an adversary:

Whereas disclosure to a third party generally waives the attorney-client privilege, the same cannot be said for application of the work product doctrine because disclosure does not always undermine its purpose.  As the purpose of the doctrine must drive the waiver analysis, we hold that the work product doctrine is waived when the work product is shared with an adversary, or disclosed in a manner which significantly increases the likelihood that an adversary or anticipated adversary will obtain it.

Id. (citations omitted, emphasis added).  As the Court further explained, this waiver rule’s “fact intensive structure requires evaluation on a case-by-case basis.”  Id.

Outside counsel’s emails with his or her client were clearly work product, but the Court remanded for determination of whether disclosure “significantly increased the likelihood that an adversary or anticipated adversary will obtain” the emails.  The Court provided the following guidance:

Courts tasked with analyzing similar factual situations generally consider whether the disclosure was “inconsistent with the maintenance of secrecy from the disclosing party’s adversary.”  Deloitte, 610 F.3d at 140.  In evaluating the maintenance of secrecy standard, a lower court should consider whether a reasonable basis exists for the disclosing party to believe “that the recipient would keep the disclosed material confidential.”  Id.

The level of confidentiality, however, should not be conflated with the heightened level of confidentiality required under the attorney-client privilege.   Indeed, “while the mere showing of a voluntary disclosure to a third person will generally suffice to show waiver of the attorney-client privilege, it should not suffice in itself for waiver of the work product privilege.”

Id. at *9 (emphasis added).  We pulled out this quote for two reasons:  First, it sets forth (at least for Pennsylvania) an objective standard—did the disclosing party have a reasonable basis to believe his or her work product would remain confidential vis-à-vis his or her adversaries.  Second, it highlights the difference between work product and the attorney-client privilege, which is ordinarily waived by voluntary disclosure to third persons.

The Court’s ruling on attorney-client privilege is equally as instructive on waiver.  Outside counsel’s communications with her or her in-house client were clearly privileged communications.  The hospital, however, waived the privilege by forwarding the emails to the PR consultant, who worked for another company, not the hospital.  Id. at *13-*14.  In a critical discussion of whether a communications with an agent of the attorney or client can waive the privilege the Court explained that the privilege is not waived where “the third-party’s presence was either indispensable to the lawyer giving legal advice or facilitated the lawyer’s ability to give legal advice to the client.”  Id. at *15.

This is important because attorneys routinely engage experts to facilitate their ability to give legal advice.  Sharing attorney-client communication with these kinds of agents should not waive the privilege in every instance.  Despite this non-waiver rule, the Pennsylvania Court held that the hospital waived the privilege because the PR consultant was not involved in formulating outside counsel’s legal advice.  On the facts as described, we think that was a close call, and we can’t help but wonder whether the result would have been different had the outside lawyers engaged the consultants, rather the client.

The key takeaways here are the waiver rules, how they operate, and how they are different from one another.  We recommend the opinion to all readers, and especially Pennsylvania practitioners.