December 2007
Author:
David Fine
717.231.5820 david.fine@klgates.com
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In a case with significant implications for corporations doing business in Pennsylvania, the
Pennsylvania Supreme Court is considering whether to affirm an intermediate appellate court’s narrow interpretation of the attorney-client privilege.
In Nationwide Mutual Insurance Company v. Fleming, 924 A.2d 1259 (Pa. Super. 2007), a three-judge panel of the Pennsylvania Superior Court held that the attorney-client privilege protects only communications in which clients seek legal advice from their lawyers but that it only protects communications from lawyers to clients when they reveal the contents of client communications seeking legal advice. In Fleming, the court considered a memorandum prepared by a lawyer with the general counsel’s office of an insurance company. The lawyer wrote the memorandum to executives of the insurance company and other members of the company’s legal department, and he described his opinion about the likely outcome of current and future litigation involving the company. The Superior Court held that, because the memorandum was from counsel to the client and revealed no confidential client communication, it was not protected by privilege. In reaching that conclusion, the court relied on a statutory codification of the privilege labeled “Confidential communications to attorney.” See 42 Pa.C.S. § 5928.
By order dated October 31, 2007, the Pennsylvania Supreme Court agreed to review the issue. The appellant’s brief is due on December 12, 2007, as are briefs of amici curiae supporting the appellant’s position.
Not surprisingly, Fleming has received considerable attention in both the legal and business communities. Many lawyers and corporate personnel had long presumed that the attorneyclient privilege protected communications between lawyer and client so long as they involve requesting, giving or receiving legal advice and regardless of who initiates the communication.
The Superior Court’s decision in Fleming raises important issues both of policy and of practice. For example, a significant number of corporations conduct their operations in highly regulated areas ( e.g., insurance companies, banks, health-care providers, managedcare organizations, mortgage lenders, utility companies, pharmaceutical companies and many others). They often rely on their own corporate counsel or on outside counsel to advise them of developments in the law and how they might affect ongoing corporate operations.
Such communications may well be unsolicited by the corporate clients but nonetheless be critically important. The Superior Court’s decision in Fleming indicates that such communications would likely not be protected by the attorney-client privilege. As a matter of public policy, that result is troubling. Corporations regularly and appropriately rely on their lawyers to keep them apprised of the most recent formulations and interpretations of the law and to be candid about how the law affects the corporation’s business. The Fleming interpretation of the attorney-client privilege could well have a chilling effect on those providing unsolicited but critical legal advice to corporations.

If the Pennsylvania Supreme Court does not reverse the
Superior Court’s judgment in Fleming, corporations doing business in Pennsylvania will have to change their communications practices and, even then, they might well not be able to expect that their important lawyer-client communications will be protected by privilege. Thus, as an initial matter, the business community should insure by means of amicus curiae filings that the Supreme Court understands the realworld ramifications of the holding in Fleming.
If the court nonetheless affirms, corporations will have to review carefully how their lawyers communicate with them in order to maximize the potential for those communications to be considered privileged.
Notably, the Pennsylvania Supreme Court will have several new members when it resolves Fleming.
Three justices are leaving the court at year’s end.
The replacements for two of them were elected last month, and Pennsylvania’s governor will shortly name a replacement for the third.
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