Chapter 6. Privilege

• Pages: 85-103
• Author: Jacqueline Promislo

85

6

PRIVILEGE

Jacqueline Promislo

Just as in other industries, healthcare providers have an interest in keeping certain

information confidential and protected from disclosure. This chapter explores

four different privileges: the investigative privilege, the common interest privi-

lege and the related joint defense privilege, peer review privileges, and the quality

assurance privilege. Whether in the context of anticipated or existing litigation, an

internal or government investigation, or obligations under federal law, it is import-

ant to understand the scope of these privileges, including potential pitfalls, so that

lawyers are better able to advise their clients.

The first three privileges examined in this chapter are rooted in the attorney-

client privilege. The primary purpose of the attorney-client privilege is to encour-

age “full and frank communication between attorneys and their clients.”1 The ele-

ments of the attorney-client privilege are that the person asserting the privilege

is or seeks to become a client, the person to whom communication was made

is an attorney or the attorney’s subordinate, the communication relates to a fact

of which the attorney was informed by the client in confidence, the communi-

cation is for the purpose of seeking legal advice, and the privilege has not been

waived.2 The burden is on the proponent to demonstrate that the attorney-client

privilege applies.3 If it applies, then communications between attorney and client

will receive absolute and complete protection from disclosure, unless or until the

privilege is waived.4 Because the attorney-client privilege can obstruct the truth-

finding process, it is narrowly construed.5

Investigative Privilege

Protecting the attorney-client privilege in the context of internal investigations is

increasingly important as the healthcare industry wrestles with an ever-expanding

regulatory landscape. Because of this increased regulation, healthcare provid-

ers are often compelled to investigate various compliance and regulatory issues.

1. Westinghouse Elec. Corp. v. Republic of Phil., 951 F.2d 1414, 1423 (3d Cir. 1991).

2. United States v. United Shoe Mach. Corp., 89 F. Supp. 357 (D. Mass. 1950).

3. United States v. Stern, 511 F.2d 1364, 1367 (2d Cir. 1975), cert. denied, 423 U.S. 829 (1975).

4. In re Grand Jury Proceedings, 102 F.3d 748, 750 (4th Cir. 1996).

5. Westinghouse, 951 F.2d at 1423.

kra57974_complete.indd 85 1/18/21 8:15 AM

An Introduction to Tort-Based Healthcare Litigation

86

Frequently, the impetus for the investigation is a subpoena or other governmen-

tal inquiry. Accordingly, attorneys must stay abreast of the potential limits on the

attorney-client privilege in the context of internal investigations to provide sound

legal advice on best practices for conducting an internal investigation.

The Supreme Court’s decision in Upjohn Co. v. United States is the starting

point for an examination of the parameters of the attorney-client privilege in the

context of internal investigations. In Upjohn, independent auditors informed the

company’s in-house counsel that improper payments had been made to foreign

government officials.6 As a result, in-house counsel, together with outside coun-

sel, conducted an internal investigation of the alleged wrongdoing. As part of the

investigation, Upjohn attorneys sent questionnaires to all of its foreign managers,

including lower-level managers. The IRS then sought all of the files relating to the

investigation.7 The Supreme Court held that the company’s internal investigation

was privileged and gave broad protection to the confidential communication of

any corporate employee with its attorneys.8 This broad shield included not only

the “control group,” such as high-level managers, but also lower-level managers.

In rejecting the control group test, the court noted that lower-level employees are

often the ones who possess the information needed by the corporation’s lawyers.9

Chief Justice Burger’s concurrence in Upjohn explained that former employees

could also fall under the protection when the former employee speaks, at manage-

ment’s direction, with an attorney regarding conduct or proposed conduct within

the scope of employment.10 While some lower courts have followed this view,11

others have not.12 Overall, courts define “the corporate client” very broadly. More-

over, it is well settled that courts will protect communications to investigators,

accountants, and others as long as they are operating under the direct supervision

of an attorney.13

6. Upjohn Co. v. United States, 449 U.S. 383 (1981).

7. Id. at 388.

8. Id. at 384.

9. Id. at 391.

10. Id. at 403 (Burger, J., concurring).

11. See Admiral Ins. Co. v. U.S. Dist. Ct., 881 F.2d 1486, 1493 (9th Cir. 1989); In re Coordinated

Pretrial Proceedings in Petroleum Prod. Antitrust Litig., 658 F.2d 1355, 1361 n.7 (9th Cir. 1981), cert.

denied, 455 U.S. 990 (1982) (The Upjohn “rationale applies to the ex-employees . . . involved in this

case. Former employees, as well as current employees, may possess the relevant information needed by

corporate counsel to advise the client.”); Amarin Plastics, Inc. v. Maryland Cup Corp., 116 F.R.D. 36,

41 (D. Mass. 1987) (“In some circumstances, the communications between a former employee and a

corporate party’s counsel may be privileged.”); Porter v. Arco Metals Co., 642 F. Supp. 1116, 1118 (D.

Mont. 1986) (Upjohn indicates that “the attorney-client privilege may extend to [defendant’s] former

employees . . . [with regard to their communications with] the company’s counsel.”); United States v.

King, 536 F. Supp. 253, 259 (C.D. Cal. 1982) (“[An attorney-client] relationship existed even though

[the witness] was not an employee of [the client] at the time of the conversation.”), overruled on other

grounds, United States v. Zolin, 842 F.2d 1135 (9th Cir. 1988).

12. See, e.g., Barrett Indus. Trucks, Inc. v. Old Republic Ins. Co., 129 F.R.D. 515, 517–18 (N.D. Ill.

1990); Connolly Data Sys., Inc. v. Victor Techs., Inc., 114 F.R.D. 89, 93–94 (S.D. Cal. 1987).

13. See United States v. McPartlin, 595 F.2d 1321, 1336 (7th Cir. 1979).

kra57974_complete.indd 86 1/18/21 8:15 AM