There can be no question but that the Pennsylvania Supreme Court’s February 23, 2011 decision in the Gillard v. AIG Insurance, et al. matter is a seminal ruling on the assertion of the scope of the privilege associated with attorney-client communications.
Gillard is a decision that arose in a bad faith claim against an insurance company, that was handling Gillard’s uninsured motorist claim. In the course of litigating the underinsured motorist claim, Gillard sought production of all documents from the files of the law firm representing the insured against whom the uninsured motorist claim was being asserted. Responding to Gillard’s document request, the insured’s attorneys withheld and redacted attorney-created documents, asserting the attorney-client privilege.
Moving to force production of the withheld and redacted documents, Gillard challenged the scope of the privilege asserted by the insured’s counsel, with Gillard maintaining that the attorney-client privilege is a “one-way street”, meaning that the privilege only attaches to communications by the client to the attorney, and was not a “two-way street” that would broadly extend the privilege to all communications to and from the attorney and client.
In support of Gillard’s motion, Gillard cited to the Pennsylvania Superior Court’s holding in Birth Center v St. Paul Co., 727 A.2d 1144 (Pa. Super. 1999), in which the Superior Courthadheld: “the attorney-client privilege … only bars discovery or testimony regarding confidential communications made by the client during the course of representation.”.
Claiming the propriety of the privilege, the insured’s counsel argued that “the attorney-client privilege protects disclosures of professional advice by an attorney to a client, if the communications by a client to an attorney enable the attorney to render sound professional advise.”, referencing Maidencreek TV Appliance v. General Casualty Insurance, a Federal Eastern District Court ruling.
Since the defense broadly raised the asserted privilege, and did not base the privilege on attorney-client communications containing derivative information originated by the client, the trial court, being the Philadelphia County Court of Common Pleas ,held that the attorney-client privilege is a “one-way street”, with very limited expansion to attorney-client communications containing derivative information originated by the client, with the trial court ordering production of the withheld and redacted documents, eviscerating the privilege raised by the defense.
Not surprisingly, the defense filed an Interlocutory appeal, asserting the collateral order doctrine. The Superior Court affirmed the trial court ruling, holding that “protection is available only for confidential communications by the client to counsel”.
In so holding, the Superior Court in Gillard treated the attorney-client privilege as being “strictly limited”.
Granting allocator, the Supreme Court elected to consider this appeal, in order to determine the appropriate scope of the attorney-client privilege in Pennsylvania, and to resolve the apparent conflict between two earlier Supreme Court decisions dealing with this privilege, in Fleming, 962 A.2d 65 (Pa. 2010), and Earle, 46 A.268 (Pa. 1900).
Noting the inconsistencies in Pennsylvania Court rulings dealing with the scope of the attorney-client privilege, the Supreme Court, in its Justice Saylor-authored opinion, predicated that this ongoing tension between the competing factors of encouraging candid communications between attorneys and their clients, and the accessibility of material evidence to further the truth-determining process, should be resolved by treating the privilege as a “two-way street”.
There being no disagreement that the attorney-client privilege does extend to provide derivative protection for client-originated information, the Pennsylvania Supreme Court adopted the learned judgment of the United States Supreme Court, that a broader derivative protection should be implicated, with the Pennsylvania Supreme Court agreeing with the majority of jurisdictions, including the United States Supreme Court, under Upjohn v. United States, 449 U.S. 383 (1981), that to facilitate open communication between clients and their attorneys, that a broader derivative protection privilege must be invoked.
Very simply, at some point, Courtshave struggled to separate client-originated information from attorney advice.
In following this trend, in terms of interpreting a broader derivative protection for the attorney-client privilege, the Court discussed and interpreted the legislative intent of Section 5923 of the Judicial Code, which reads:
5928. Confidential Communication to Attorney
“In a civil matter, counsel shall not be competent or permitted to testify to confidential communications made to him by his client, nor shall the client be compelled to disclose the same, unless in either case this privilege is waived upon the trial by the client.
Interpreting the legislation’s intent with respect to Section 5928, the Court did not find, relying upon principles of statutory construction, that the legislature intended to limit the privilege from being applied in the context of derivative protection, and thus being a privilege that would permit a “two-way” invocation, as opposed to an exclusively “one-way” application.
In ruling in favor of a broader scope for a derivative protection to apply in attorney-client communications, the Pennsylvania Supreme Court held “we hold that, in Pennsylvania, the attorney-client privilege operates in a two-way fashion to protect confidential client to-to attorney or attorney-to-client communication made for the purpose of obtaining or providing professional legal advice”.”
In so ruling, the Supreme Court reversed the Superior Court with the case being remanded back to the trial court.
Justices Castille, Baer, Todd, and Melvin, joined in the majority opinion, with Justices Eakin and McCaffery dissenting.
Dissents
While the dissenting justices agreed that a derivative protection is necessary, the dissenters would not extend that derivative protection to every attorney-to-client communication, absent the communication containing client-originated information.
The dissenters also argued that Section 5928 of the Judicial Code clearly articulated, at least for the dissenters, that the attorney-client privilege would be a “one-way” street, and that to subvert its legislative intent, through statutory construction, to secure a statutory interpretation for which there was no clear legislative mandate, overstepped, in the dissenter’s view, the judicial authority vested in the Supreme Court.
Practical Implications
Obviously, very strong arguments exist for the proponents of both limiting and expanding the scope of the derivative protection for attorney-client communications.
Since privilege is, as the dissenters so emphatically reinforced, a deviation from the norm, which is contra privilege, and more aligns itself with full disclosure, to facilitate the truth-determining process, the dissenters would nevertheless limit the privilege, arguing, in opposition to the majority’s opinion, that another privilege, that of “work-product”, under Pennsylvania Rules of Civil Procedure Nos. 4003.4 and 4003.5 that “discovery shall not include disclosure of the mental impressions of a party’s attorney, orhis orher conclusions, opinions, memoranda, notes or summaries, legal researchor legal theory …”. Should have been the operative base for asserting a claim of non-production.
This ruling will have the greatest application in bad faith litigation, although the majority opinion made no substantive analysis of the communications that were withheld and redacted, in terms of whether the privilege asserted was grounded in a claim of derivative protection involving legal advice predicated on client-originated information.
– By Kevin L. Connors
ConnorsLaw LLP
Our casualty litigation practice group routinely defends litigation for self-insureds, third-party administrators, and insurance carriers throughout Southeastern and Eastern Pennsylvania, appearing in state and federal civil courtrooms in Philadelphia, as well as in the surrounding counties of Bucks, Montgomery, Delaware, Chester, Lancaster, Berks, Lehigh, Northampton, and Schuylkill.
