• Does the Attorney-Client Privilege Protect In-House Counsel’s Advice? Uncertainty Rules - Nationwide v. Fleming
  • February 22, 2010 | Author: Kevin P. Allen
  • Law Firm: Thorp Reed & Armstrong, LLP - Pittsburgh Office
  • The Pennsylvania Superior Court and Supreme Court have made a mess of things. On January 29, 2010, the Supreme Court, after a long delay, finally announced its decision in Nationwide v. Fleming. However, the Supreme Court split evenly, and therefore left intact the Superior Court’s dubious decision, which appears to narrow substantially the scope of Pennsylvania’s attorney-client privilege.

    In Fleming, the document at issue (“Document 529”) was a sensitive litigation strategy memorandum from a Nationwide in-house lawyer to other Nationwide lawyers and executives. Document 529 included the author’s opinion that Nationwide had little chance to succeed with the litigation but nevertheless should pursue it in order to “send a message” to non-litigants, situated similarly to the Fleming defendants. Not the type of document Nationwide wanted to get out.

    The trial court ordered Nationwide to produce Document 529, not because it was not privileged, but because the trial court concluded that Nationwide had waived the privilege by producing related documents. On appeal, the Superior Court affirmed but on a far different basis. The Superior Court held that the document simply was not privileged at all. The Superior Court held that the privilege protects only client to counsel communications, and not counsel to client communications. The Superior Court concluded that Document 529 was never privileged because it was a communication from counsel to client, not from client to counsel, and did not reveal any prior client to counsel communications.

    Therefore, the Superior Court’s decision arguably places an in-house lawyer’s - any lawyer’s - advice to his or her client outside the attorney-client privilege.

    The Pennsylvania Supreme Court accepted the appeal only on the issue of the Superior Court’s narrow view of the scope of the privilege.

    Only four Supreme Court Justices participated in the appeal, and they split evenly. Two voted to affirm, but, consistent with the trial court, on the basis of waiver. Those two refused to address expressly the merits of the rationale for the Superior Court’s decision. Two voted to reverse, disagreeing with the Superior Court’s narrow view and finding no waiver. Thus, all four Justices appear to have concluded that the privilege initially applied to Document 529; they just disagreed on whether Nationwide had waived the privilege.

    However, because of the even split at the Supreme Court, the Superior Court’s decision stands. Litigants seeking to pry into the advice that in-house lawyers provide can, and the clever and aggressive ones no doubt will, argue that Pennsylvania trial courts are obliged to abide by the Superior Court’s Fleming decision and compel clients to disclose the advice they received from their lawyers.

    This outcome in Fleming is troubling, particularly for in-house counsel. However, don’t yet lose sleep with worry about seeing your sensitive legal advice splashed across headlines or class action complaints. Despite Fleming, legitimate steps are available to preserve the confidentiality of a lawyer’s advice to clients - such as the proper invocation of the work product doctrine (which was absent in Fleming), effectively distinguishing Fleming and Document 529 from any circumstance that arises, and simply and frontally challenging Fleming’s legitimacy.