New Guidance for Privilege Analysis

Court Provides Illustrative Guidelines

When a privilege dispute erupted between the parties in SodexoMAGIC, LLC v. Drexel University, the U.S. District Court for the Eastern District of Pennsylvania reviewed a sample of 50 internal emails in camera to evaluate whether any should be produced. Although many communications between in-house counsel and their corporate clients are protected by privilege, the court held, those that are merely administrative or deliver business advice as opposed to legal advice are discoverable. The court articulated the following ground rules:

• A communication with an attorney subordinate such as a paralegal working as an agent for the attorney is privileged, so long as the communication was made “for the express purpose of securing legal not business advice.”
• A communication with an attorney or subordinate acting in “scrivener-like” capacity is not privileged. This includes exchanges of draft agreements where, for example, an attorney or paralegal merely inserts revisions requested by the client without offering any additional input.
• A communication between client and counsel in which legal advice is either requested or rendered about the substance of a draft contract or proposed contract language is privileged.
• Although parts of an email thread may be privileged, other parts may not be privileged, in which case, the privileged portions should be redacted, but the rest of the thread produced.

The court then illustrated the application of those rules using a set of 13 hypothetical email messages, demonstrating how a conversation about contract negotiation might develop among in-house counsel, paralegals, and business executives in which some of the emails and attachments should be considered privileged, but others should not.

Using Hypotheticals as a Resource

Section of Litigation leaders applaud the court’s opinion as providing solid guidelines for privilege analysis, which can sometimes become rather nuanced. “While the judge addresses specific documents involved in this case, he also provides a good overview of legal concepts governing claims of privilege and useful examples of what types of communications may be withheld on the basis of privilege claim,” opines Kenneth M. Klemm, cochair of the Section of Litigation’s Pretrial Practice & Discovery Committee.

Careful consideration of a document’s contents is important when deciding whether the document is privileged, according to Klemm. “The judge in this case explains why a privileged information claim does not protect certain written communications from discovery by the opposing party,” he states. If a claim of privilege is questionable, Klemm suggests that a litigant’s rights may be best protected by initially offering the document as privileged communication and letting the judge make the final call during an in camera review.

Section leaders suggest comparing the examples provided in the opinion against the documents a party might wish to withhold during discovery. “Producing parties should use the examples provided by the court in this opinion as a guide when reviewing their own documents so they can better determine when a document is truly privileged in order to make the discovery process more efficient for all parties involved in the litigation,” says Emily J. Kirk, cochair of the Section’s Solo & Small Firm Committee. More precise privilege analysis will likely limit the amount of discovery challenges in litigation, Kirk adds. If there are challenges to the privileged documents, lawyers will save time developing arguments because they have previously considered this opinion’s example, she explains.

Impact on Daily Practice

Often, in-house counsel take on roles that extend beyond delivering legal advice. These attorneys, who may sometimes take on more administrative roles or consider purely business interests, must “actively work to prevent mere scrivener-like roles in their emails and documents because they are not privileged,” warns Michael S. LeBoff, cochair of the Commercial & Business Litigation Committee. The opinion clarifies that simply marking up a draft during rounds of edits is not sufficient to invoke a privilege protection, LeBoff says. “You should consider whether the document or draft contract is simply business in nature or if it actually provides legal advice,” he states.

This is an important consideration both for in-house attorneys and outside counsel, Klemm concludes. Attorneys must “understand these general concepts and guide their clients appropriately to ensure that privileged information remains protected in any later disputes,” he adds.

Josephine M. Bahn is a contributing editor for Litigation News.

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Related Resources

• 42 Pa.C.S.A. § 5928.
• Stephanie Francis Ward, "How Will Prosecutors Handle Privileged Documents From Michael Cohen Raids?," ABA J. (April 12, 2018).
• Montgomery County v. MicroVote Corp., 175 F.3d 296, 301 (3d Cir. 1999).

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