It has been two years since a federal magistrate judge in Florida rattled the compliance community by narrowly construing the application of the attorney-client privilege to various communications between in-house counsel and nonlawyer employees of a hospital. Since United States ex rel. Baklid-Kunz v. Halifax Hospital Medical Center, No. 6:09-cv-1002, 2012 U.S. Dist. LEXIS 158944 (M.D. Fla. Nov. 6, 2012), a number of significant privilege decisions have been rendered, as courts continue to grapple with the application of the attorney-client privilege in the face of ever-evolving and expanding regulatory and enforcement environments. Healthcare providers reviewing compliance issues or navigating inquiries by government regulators should pay particular attention to this line of cases.
Courts have struggled to articulate an appropriate standard for resolving privilege disputes when a communication may have legal, business, or compliance purposes. In Halifax, the district court took a narrow view of privilege when communications contained overlapping purposes, with the result that most communications at issue were found to be not privileged. The D.C. Circuit has recently cautioned, however, that such narrow interpretations of the attorney-client privilege could altogether “eradicate” the privilege in certain contexts, particularly in the face of extensive regulatory schemes with specific compliance requirements. See In re Kellogg Brown & Root, 756 F.3d 754, 759 (D.C. Cir. 2014).