Lessons on the Attorney-Client Relationship from the Pennsylvania Supreme Court’s Recent Decision in Bousamra v. Excela Health

A recent opinion by the Pennsylvania Supreme Court provides important guidance on when your organization can communicate with a third-party without waiving the protections of the attorney work product doctrine or the attorney-client privilege. Specifically, an organization must take steps to avoid disclosure of its privileged communications and work product to the population in general, and to its litigation adversaries in particular. The Court’s message is clear—think twice before clicking “send” on an email involving lawyers or legal advice, and ask your employees to exercise the same caution.

In Bousamra v. Excela Health, 2019 WL 2509384 (Pa. Jun. 18, 2019), physician George R. Bousamra sued Excela for defamation and interference with contractual relations. In 2011, Excela announced the results of a peer-review investigation, which revealed that Dr. Bousamra performed operations on over 100 patients for whom medical treatment may not have been medically necessary. Prior to this announcement, Excela’s general counsel communicated with outside counsel regarding the investigation to seek legal advice on the Bousamra matter. Unfortunately, Excela’s general counsel eventually forwarded certain of these communications to an outside public relations firm that Excela retained to provide crisis management services.

As the litigation progressed, Excela sought to protect these communications from disclosure via the attorney-client privilege and the attorney work product doctrine. Dr. Bousamra argued that when Excela’s general counsel forwarded the communications to Excela’s outside crisis management team, Excela waived any privilege that previously attached to the communications with Excela’s outside counsel. After a years-long dispute, the Supreme Court held that Excela Health did not waive the attorney work product doctrine—but did waive the attorney-client privilege—when Excela’s general counsel forwarded the email between himself and outside counsel.

In deciding this discovery issue, the Supreme Court examined the actual communications between Excela and its outside counsel, determining that those communications constituted attorney work product, but leaving open the question of whether Excela waived the protections of that doctrine by sending the communications to Excela’s public relations firm. Setting forth the new standard in Pennsylvania for waiver of the attorney work product doctrine, the Court held that “the attorney work product doctrine is not waived by disclosure unless the alleged work product is disclosed to an adversary or disclosed in a manner which significantly increases the likelihood that an adversary or anticipated adversary will obtain it.” To determine whether Excela waived the protections of the attorney work product doctrine in this particular case, the Supreme Court remanded the case to the trial court to develop a more complete factual record. The crucial issue on this second review will be whether Excela took adequate steps to prevent the widespread disclosure of its communications with counsel. Put differently, the trial court will examine whether, in forwarding privileged emails to a non-lawyer third-party, Excela made it more likely that Dr. Bousamra would have access to Excela’s communications with counsel. At this time, the trial court has not yet ruled on these issues, and the parties will continue to litigate this issue.

However, the Supreme Court did not defer its ruling on Excela’s waiver of the attorney-client privilege. The Court held that Excela’s forwarding an otherwise privileged email to a third-party waived the attorney-client privilege. The Court conceded that in certain instances, an attorney may need to include an outside non-lawyer on privileged communications in order to provide legal advice. In those cases, the inclusion of an outside, non-lawyer will not waive the attorney-client privilege. Specifically, the Court identified accountants and interpreters as the types of non-lawyer third-parties that can be included in privileged communications, when those third-parties assist the lawyer in rendering legal advice. However, in the Bousamra case, the Court found that Excela merely forwarded privileged communications to a non-lawyer third-party, and that the purpose of forwarding those communications was public relations management, and not the provision of legal advice. The Court noted that Excela’s general counsel forwarded the otherwise-privileged emails after the outside counsel’s legal advice had already been rendered. Accordingly, the Court found that Excela waived the attorney-client privilege over those contested documents.

Practical Advice To Avoid Waiving the Attorney-Client Privilege and/or the Attorney Work Product Doctrine

In practice, if the trial court finds that Excela did not waive the protections of the attorney work product doctrine, Dr. Bousamra will not have access to the communications at issue—even though the Court held that Excela waived the attorney-client privilege. However, there are certain communications between a client and its attorney that do not involve the mental impressions or conclusions of counsel, and will only be protected by the attorney-client privilege. If such communications had been at issue in the Bousamra case, Excela’s forwarding of its emails with counsel would have resulted in Dr. Bousamra accessing those communications—and potentially using them against Excela. This is the principal danger that any organization faces when it exposes privileged and protected communications and documents to potential waiver—the possibility that its most closely-guarded secrets will become open to the public.

However, even if the trial court finds in favor of Excela, Excela has been forced to expend years of time and significant legal expenses in a discovery battle over the production of certain communications with counsel. Because the Supreme Court’s new rule requires a fact-specific inquiry into issues of waiver, Excela’s fight to protect its communications with counsel will continue to be time-intensive and costly. This significant expenditure of resources is an additional reason why every organization should treat privilege issues with care.

The Bousamra case is an important reminder of the potential dangers of disclosing “legal” communications and materials with a third-party. In light of this ruling, organizations should consider:

• Educate their employees on the attorney-client privilege and the attorney work product doctrine. Emphasize the importance of these privileges, outline what they protect, and discuss the dangers of waiving them. In short, remember that the attorney-client privilege protects communications between employees of an organization and that organization’s counsel—as long as those communications remain confidential, and do not include outsiders. The attorney work product doctrine protects the mental impressions and work product of a lawyer and the lawyer’s representatives—as long as those parties take steps to protect that work product from disclosure to an adversary.
• Play “spot the lawyer.” Be mindful of any communications that include a lawyer, or which contain legal advice, and educate employees on ways to identify privileged or protected materials. Consider utilizing a special email signature or document watermark to make it easier for employees to spot communications that may be protected by a privilege.
• Think carefully before sending an email or picking up the phone to a third party. Before forwarding legal communications to a third-party, or before including someone who is not an employee or your organization on a communication with counsel, consider whether the communication will potentially waive a privilege. If your employees have any questions about whether an individual should be included in written or oral communications, encourage them to consult with counsel.
• When communicating about legal matters, always mark the communication as “confidential” or “privileged.” Sometimes issues that appear trivial at first impression can give rise to a broad waiver of privilege if they contain legal advice and find their way outside of your organization.
• If you or your employees are communicating about legal matters with a third-party, consider requiring the third-party to sign a non-disclosure agreement, or—at a minimum—to confirm in writing that the communications will remain confidential, and will not be disclosed to other parties.

If you have any questions about the Bousamra decision or its implications for you and your employees, please contact Clark Hill PLC to discuss these issues further.