When can a public relations firm’s services be so integral to litigation that communications among the lawyer, client, and the PR firm are subject to attorney-client privilege?
Plaintiffs Create Website as Leverage for Litigation
The lawsuit arose out of a failed real estate investment. Nicholas Behunin sued Charles Schwab, known by the eponymous brokerage firm, and Schwab’s son. The plaintiff’s attorneys hired a public relations firm to create a website that purported to link the Schwabs and their real estate investments in Indonesia to the family of former Indonesian dictator Suharto. The Schwabs subsequently sued Behunin for libel, slander, and invasion of privacy. As part of that suit, the Schwabs sought discovery related to the creation of the website. Behunin argued that these communications were protected by attorney-client privilege.
The trial court overruled many of Behunin’s objections on privilege. Behunin appealed.
Appeals Court Focuses on Relationship of PR Firm to the Litigation
The court of appeal began its analysis by noting that privileges in California are set forth by statute and that the courts cannot extend them. Accordingly, the issue was whether the communications to the public relations consultant were “reasonably necessary to accomplish the purpose for which the client consulted the attorney.”
The court distinguished this case from those cases in which the lawyer consulted a physician or an appraiser, which were consulted to better advise the client. It also distinguished this case from situations of “joint concern,” such as when a communication is made to a plaintiff and the plaintiff’s spouse, as this person has a joint concern with the plaintiff.
Behunin argued that the communications were protected as other third-party consultants who aid the attorney in litigation. Finding no state cases involving public relations firms, the court looked to federal decisions, and observed that cases are split on the issue.
The court was especially persuaded by one decision in which the plaintiff failed to establish that the communications with the PR firm were privileged, despite presenting a privilege log, documents, and declarations that the PR consultants participated in legal strategy and developed legal narrative. The plaintiff did none of that here, leading the court to conclude that all the lawyer did was act as a liaison in hiring the public relations firm.
The court also rejected the plaintiff’s argument that communications with the public relations firm were reasonably necessary because negative publicity would bring the defendants to the settlement table. It reasoned that all kinds of strategies could be employed to bring the defendants to the settlement table, like hiring away the defendant’s employees, or lobbying governmental officials to regulate their business, or even creating a competing business. Those activities, the court reasoned, would not be privileged, either.
While the facts here fell short, the court suggested that there “may be situations in which an attorney’s use of a public relations consultant to develop a litigation strategy or a plan for maneuvering a lawsuit into an optimal position for settlement would make communications between the attorney, the client, and the consultant reasonably necessary for the purpose for which the attorney is consulted.”
An Emerging Issue?
Section leaders differed on whether the case presents an emerging issue. “I do think we’ll see more disputes like this as more people litigate in the press,” suggests Robert J. Will, St. Louis, MO, cochair of the Section of Litigation’s Pretrial Practice & Discovery Committee. But that view is not shared by all. “I think it’s an issue that lawyers wrestle with regularly,” says Robert E. Poundstone, Montgomery, AL, cochair of the Section of Litigation’s Pretrial Practice & Discovery Committee.
Leaders do agree that the outcome was driven by the importance of the communications. “I wasn’t surprised at the outcome because the PR firm did not help the lawyer in providing legal services,” says J. Dalton Courson, New Orleans, LA, cochair of the Section of Litigation’s Civil Rights Litigation Committee. Yet “these communications were at the heart of the case,” says Will. “This was not a case where the PR firm had nothing to do with the central issues in the case, but rather was an ‘actor’ in setting up the very website that plaintiffs claimed was defamatory and/or an invasion of privacy.”
While the decision was deeply factual, one lesson is the value of prevention. “My advice is for the lawyer to issue an engagement letter to the PR firm, outlining the purposes of the retention and how the services the PR firm will be providing the lawyer aid the lawyer’s representation of the client,” suggests Courson. “If you are using PR folks,” cautions Will, “you should be awfully circumspect, and assume that what you share will not be privileged.”
But some situations might call for a different outcome. “From a civil rights organization’s perspective,” Courson observes, “PR is part and parcel of the representation because the organization’s ultimate goal is often to cause a change in the law. There may be a greater chance that those communications would be considered to be privileged because they facilitate the purpose of the representation.”
Andrew J. Kennedy is an associate editor for Litigation News.
Keywords: public relations, attorney-client privilege, waiver
- Edna Selan Epstein, The Attorney-Client Privilege and the Work-Product Doctrine (ABA 2017).
- Caroline Rule, How Not to Waive Privilege When Consulting Non-Attorney Experts or Professionals, ABA Section of Litigation (Nov. 30, 2016).
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