Wednesday, February 3, 2010

Split Decision by Pennsylvania Supreme Court on Attorney-Client Privilege Issue

Recently, on January 29, 2010, the Pennsylvania Supreme Court issued a 2-2 per curiam split decision in the attorney-client privilege case of Nationwide Mut. Ins. Co. v. Fleming, 2010 WL 336171, No. 32 WAP 2007 (Pa. 2010). Only four Justices took part in the decision because Justices Debra M. Todd and Seamus McCaffery had to recuse themselves, having sat in on the same case when they were previously on the Superior Court. The Court was also down a Justice at the time this case was considered because of a retirement.

Justices J. Michael Eakin and Max Baer voted to affirm the Superior Court's decision and Justices Saylor and Chief Justice Castille voted to reverse. Under the rules of the Court, the 2-2 split means that the Superior Court decision was affirmed.

Basically, the case involved a lawsuit brought by Nationwide against a group of former insurance agents who allegedly provided confidential information on policyholders to competitors of Nationwide. The agents countersued under a claims of bad faith and improper efforts by the carrier to drive the agents out of business.

In the underlying action, the agents wanted to compel the production of a document drafted by Nationwide's attorney and provided to the client, which document outlined the attorneys' assessment of the potential liability of the agents and also discussed strategy for the lawsuit against the agents. This document was identified as Document 529 in the Opinion. The document also contained the attorneys' assessment that the suit against the agents was not likely to succeed, but that the primary purpose of pursuing such a suit was to send a message to other agents.

Although Nationwide refused to produce the above document, it did voluntarily produce other documents authored by the attorneys, identified as Documents 314 and 395. These produced documents portrayed Nationwide's case against the agents in a more favorable light.

The trial court in this case found that Nationwide waived any asserted privilege with respect to Document 529 by voluntarily producing Documents 314 and 395, given that all of the documents essentially dealt with the same topic.

The Superior Court had affirmed on the alternative grounds that the privilege only protects confidential communications from a client to an attorney in connection to the providing of legal services. That is, the Superior Court decision appears to stand for the proposition that the attorney-client privilege only applies to information given to the attorney by the client and not the other way around. As stated, the split decision of the Supreme Court leaves this as the law of the land.

The Supreme Court Opinion in reversal, written by Justice Saylor and joined in by Chief Justice Castille, criticized the Superior Court's ruling, finding that attorney advice and information from clients are "often inextricably intermixed." These Justices felt that the Superior Court rule presents "'inordinate practical difficulties' that make the rule administratively and judicially unworkable." The Opinion in reversal would have recommended erring on the side of caution and apply to the attorney-client privilege to all communications between an attorney and client.

According to a February 2, 2010 article by Gina Passarella of The Legal Intelligencer entitled "Justices Can't Agree on Attorney-Client Privilege Dispute," the Pennsylvania Supreme Court may get another chance to review this case, presumably with a full panel of Justices, in the case of Gillard v. AIG. A petition for allocatur on that case is currently pending before the Court.

To view the Nationwide v. Fleming Opinions and Order, click on these links:

Per curiam Order: http://www.aopc.org/OpPosting/Supreme/out/J-27-2008pco.pdf

Opinion in Affirmance: http://www.aopc.org/OpPosting/Supreme/out/J-27-2008oisa.pdf

Opinion in Reversal: http://www.aopc.org/OpPosting/Supreme/out/J-27-2008oisr.pdf


Thanks to Attorney Matt Keris of the Moosic, PA office of Marshall, Dennehey for bringing this decision to my attention.

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