Ryan Boland Featured in the Legal Intelligencer
In Bousamra v. Excela Health, 2017 PA Super 66 (March 13), the state Superior Court addressed whether a company waives the attorney-client and work-product privileges when it shares privileged communications with a third party. More specifically, the Bousamra court addressed whether a hospital waived the attorney-client privilege by sharing a legal opinion letter with its public relations consultant. For the reasons explained below, the Superior Court affirmed the trial court’s ruling that the hospital waived the attorney-client privilege.
As a matter of background, the lawsuit arose out of a hospital publicly accusing two physicians of providing unnecessary medical procedures. The hospital was sued by the two accused physicians and discovery ensued. Through discovery, the physicians learned that the hospital had hired a public relations consultant. The physicians also learned that the hospital retained outside counsel to provide an opinion letter on the propriety of publicly naming the physicians when announcing the findings of misconduct. A dispute arose when the hospital claimed that the outside counsel’s opinion letter was privileged, despite the fact that it was shared with its public relations consultant.
The trial court examined whether an exception applied to the general rule governing waiver of the attorney-client privilege. It noted that “there is an exception where a third party acting as an agent of a lawyer is facilitating the lawyer’s representation.” The trial court found that the exception did not apply because the public relations consultant was the agent of the hospital, not the agent of the hospital’s outside counsel. The trial court also found the exception did not apply because the public relations consultant did not assist outside counsel with giving legal advice to the hospital.
The Superior Court examined United States v. Kovel, 296 F.2d 918 (2nd Cir. 1961), which addressed whether a law firm specializing in tax law could communicate with an accountant to help the lawyers give legal advice to a client. The U.S. Court of Appeals for the Second Circuit noted that waiver of the privilege would not occur if an attorney was using the assistance of an interpreter to overcome a language barrier. The Second Circuit stated that accounting principles are often a foreign language to attorneys, therefore the use of an accountant to facilitate communication with a client is not different than the use of an interpreter. The Superior Court acknowledged the Second Circuit finding that the privilege applied because the “presence of the accountant is necessary, or at least highly useful, for the effective consultation between the client and the lawyer.” The Superior Court found that the presence of the third party “must be necessary or, at the very least, useful for purposes” of the lawyer giving legal advice. The Bousamra court held that the public relations consultant was not hired to aid in rendering legal advice, so the privilege was waived by giving the legal opinion letter to the public relations consultant.
Next, the Superior Court examined whether the work-product privilege could protect the attorney opinion letter. It noted that the work-product privilege is embodied in Pa.R.Civ.P. 4003.3. It discussed the appellee’s argument that the letter could not be work product because there was no pending litigation when the letter was drafted and thus it was not prepared in anticipation of litigation. The court examined a Commonwealth Court opinion, Bagwell v. Pennsylvania Department of Education, 103 A.3d 409 (Pa.Commw. 2014), which addressed whether Penn State University had waived the attorney-client and work-product privileges in connection with hiring attorneys to provide advice relating to the allegations against former Penn State University football coach Jerry Sandusky. In Bagwell, the Commonwealth Court rejected an argument that documents prepared by attorney Louis Freeh, an independent investigator hired by Penn State, were not protected by the work-product privilege because they were not created in anticipation of litigation. The Bagwell court noted that given the nature of the allegations against Sandusky, Penn State clearly anticipated that there would be litigation. It noted that although no litigation was commenced, since litigation was on the horizon, the attorneys’ mental impressions were undisputedly protected work product.
The Bousamra court held that the outside counsel was consulted in anticipation of litigation, therefore the opinion letter was protected by the work product privilege. However, it then examined whether the work product privilege was waived. The Superior Court again relied upon Bagwell, wherein the Commonwealth Court stated that the work-product privilege, like the attorney-client privilege, could be waived by revealing it to a third party. The Superior Court held that the work-product privilege was waived by virtue of the hospital disclosing the legal opinion letter to its public relations consultant.
Based upon the Superior Court’s ruling in Bousamra, attorneys and their clients must be very careful not to share any privileged communications with third parties. The only way a privileged communication can be shared with a third party while preserving the privilege is if the attorney (not the client) engages a third party and the third party’s assistance is necessary for the attorney to properly communicate legal advice to the client. In other words, the third party needs to possess an expertise that the lawyer needs to communicate legal advice.
Perhaps, if the hospital’s law firm directly communicated with the public relations consultant to provide it with advice regarding its proposed message and whether it could be legally communicated, then the content of the opinion letter would have remained privileged. It is curious why the hospital did not orally communicate the conclusion of its counsel, rather than sending the public relations counsel the entire opinion letter.
If you have questions about the attorney-client or work-product privileges, please contact Ryan Boland at firstname.lastname@example.org or 267-338-1312.
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Ryan Boland is a principal attorney who represents corporations, financial institutions, and individuals in the areas of complex commercial litigation, corporate litigation, and banking law. Mr. Boland also serves as outside general counsel to owner managed businesses. Mr. Boland has extensive experience in the areas of real estate litigation, employment litigation (including prosecuting and defending restrictive covenants), as well as providing general corporate and real estate advice. Mr. Boland also handles intellectual property law cases, including preparing, filing, and prosecuting federal trademark applications and arbitrating Uniform Domain-Name Dispute Resolution Policy (UDRP) disputes.
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