CHAPTER § 12.05 Self-Critical-Analysis Privilege

• Jurisdiction: United States

§ 12.05 Self-Critical-Analysis Privilege

[1] Purpose and History

In addition to the attorney-client privilege and work-product doctrine, the self-critical-analysis privilege ("SCA privilege") may also be available to pharmaceutical companies for certain documents.²⁰⁸ The SCA privilege is a qualified privilege that protects certain critical self-appraisals from discovery and use at trial. The SCA privilege is "designed to protect the opinions and recommendations of corporate employees engaged in the process of critical self-evaluation of the company's policies for the purpose of improving health and safety."²⁰⁹ It allows individuals or businesses to candidly assess their compliance with regulatory and legal requirements without creating evidence that may be used against them in future litigation. The rationale for the privilege is that such critical self-evaluation promotes public safety and the compelling public interest of corporate observance of the law, and the disclosure of subjective self-critical analysis would chill such practices.²¹⁰ In this regard, the SCA privilege has been analogized to Federal Rule of Evidence 407, which excludes evidence of subsequent remedial measures.²¹¹

Although individual courts have embraced the SCA privilege, the privilege does not yet enjoy wide acceptance.²¹² The Supreme Court and the circuit courts have neither definitely denied the existence of such a privilege nor accepted it and defined its scope.²¹³ Rather, when confronted with a claim of the privilege, many courts have assumed that the SCA privilege exists and then have refused on narrow grounds to apply it based on the particular facts before them.²¹⁴ Like federal courts, state courts are also sharply divided on the existence and parameters of the SCA privilege.²¹⁵

At the same time, however, almost all 50 states have a statutory SCA privilege for communications taking place in the context of a medical-services peer-review committee.²¹⁶ The decision widely regarded as being the seminal SCA privilege case, Bredice v. Doctors Hospital, Inc.,²¹⁷involved such a medical peer-review committee. Both Bredice and the statutory provisions that followed protect such communications on the premise that these medical peer-review committees are essential to improved health care and that the threat of discovery or use in subsequent litigation would chill further use of these committees.

Beginning with Bredice, federal courts have both upheld and rejected the SCA privilege in a wide variety of contexts applicable to pharmaceutical manufacturers, including affirmative action or employment records,²¹⁸ competitive business analyses,²¹⁹ environmental-compliance self-audits,²²⁰qui tam actions under the False Claims Act,²²¹ financial and accounting audits,²²² insurance-policy analyses,²²³ marketing and sales reviews,²²⁴ employee-performance reviews,²²⁵ product-safety assessments,²²⁶ medical peer reviews,²²⁷ and workplace- or premises-safety documents and accident reports.²²⁸

[2] Definition

Federal courts have adopted a number of different and sometimes conflicting tests for applying the SCA privilege. One of the most oft-cited standards used to decide whether a document fits within the SCA privilege²²⁹ is a four-part test articulated by the Ninth Circuit in Dowling v. American Hawaii Cruises, Inc.²³⁰This test requires parties asserting the privilege to demonstrate that the material satisfies four criteria:

(1) the information must result from a critical self-analysis undertaken by the party seeking protection; (2) the public must have a strong interest in preserving the free flow of the type of information sought; (3) the information must be of a type whose flow would be curtailed if discovery was allowed. . . . [and (4) the information] was prepared with the expectation that it would be keep confidential, and it has in fact been kept confidential.²³¹

Another prominent line of cases uses a different standard that, in at least one important respect, conflicts with the Dowling test. This test is best exemplified by the Northern District of Illinois' holding in Resnick v. American Dental Association:²³²

1. To be privileged, the materials must have been prepared for mandatory government reports.
2. Any privilege extends only to subjective, evaluative materials.
3. It does not extend to objective data in the same reports.
4. Discovery has been denied only where the policy favoring exclusion has clearly outweighed plaintiffs' need.²³³

Whereas the Dowling test emphasizes the importance of a voluntary act of self-critical analysis—one that could "be curtailed if discovery was allowed"—the first requirement of the Resnick test is that the self-critical analysis be prepared for "mandatory government reports."²³⁴ As more than one court has observed, a self-critical analysis undertaken for mandatory government reports would seemingly fail the Dowling test because the threat of discovery can have no chilling effect on an analysis required by law.²³⁵ Yet if a self-critical analysis is not taken pursuant to a mandatory government report, it automatically fails the Resnick test.²³⁶

The most cogent effort to harmonize this conflict comes from a Northern District of Illinois decision which observed that these two rules arose from two different contexts to serve two different public policies. This court observed that the Dowling formulation, which was more or less a direct descendant of the seminal Bredice case, arose in the context of tort or personal-injury cases.²³⁷ This led to the Dowling formulation, which emphasizes the need to protect voluntary self-critical analysis against the chilling effect of discovery. Once the SCA privilege was applied to the employment-discrimination context, however, considerations of fairness began to drive the privilege.²³⁸

Consequently, the proper test to apply for the SCA depends on whether the main public policy at stake is fairness or safety. This has led to some "hybrid" situations, such as employment-discrimination cases in which the discovery dispute involves safety-related self-critical analyses.²³⁹ While there are innumerable federal cases,²⁴⁰ including Dowling itself,²⁴¹ that have failed to observe the distinction between these two tests, the harmonizing explanation offered by the Northern District of Illinois is the better view, and should be adopted by parties seeking to make use of the SCA privilege.

[3] Limitations

[a] Litigation Need

Because the SCA privilege is qualified and not absolute, some courts will allow a discovering party to overcome the privilege with a traditional Rule 26 balancing test between litigation need and public-policy harm.²⁴² In these jurisdictions, courts must weigh the "powerful interest in confidentiality" against a "demonstrated need for specific evidence."²⁴³ According to the least deferential version of the SCA privilege, such materials "should be treated as any other confidential business material, though with recognition of the public interest involved."²⁴⁴ Consequently, courts following this interpretation apply an ordinary balancing process between the discovery party's litigation need for the information and the public harm which may result from disclosure.²⁴⁵ On the other hand, multiple courts (including in the seminal Bredice decision) have set a heightened standard for overcoming the SCA privilege, requiring a showing of extraordinary circumstances or special need.²⁴⁶

[b] Subjective Evaluations

Many courts have held that the SCA protects only subjective evaluations, but not the objective facts on which those evaluations are based.²⁴⁷ Faced with mixed documents containing both subjective and objective information, courts may order production of the factual or statistical information underlying the subjective analysis, even as they protect the evaluations themselves under the SCA privilege.²⁴⁸ One court has even added the requirement that the subjective evaluation have a positive social impact.²⁴⁹ This appears to be an anomaly, however, and most courts would probably weigh such considerations in the second part of the Dowling test,²⁵⁰ in the fourth prong of the Resnick standard,²⁵¹ or in the Rule 26 balancing test.²⁵²

[c] Pre-Accident Versus Post-Accident Reports

Because of its similarity to Federal Rule of Evidence 407, another common limitation of the SCA privilege in the tort or personal-injury context is that the privilege generally applies only to post-accident, and not to pre-accident, self-critical analyses.²⁵³ The rationale for this limitation is two-fold. First, while pre-accident reports may be relevant to the issue of the defendant's notice of the dangerous condition, post-accident reports are not.²⁵⁴ Second, similar to the policy behind Rule 407, courts do not wish to discourage post-accident remedial measures, including self-critical analyses. But as the Ninth Circuit observed in Dowling, the potential for chilling effect of litigation is not as significant a concern for most pre-accident reports, since avoiding litigation is already one of the factors motivating such pre-accident analyses.²⁵⁵

[d] Government Requests for Information

Most courts also hold that the SCA privilege cannot shield information from a document request or subpoena from a government agency.²⁵⁶ Courts have created this exception to the SCA...