The self-critical analysis privilege in the product liability context: if analyzed as a subsequent remedial measure, self-evaluation wouldn't impede discovery, but the information would be protected.

• Author: Hodges, George S.

IT IS self-evident that any business should emphasize self-critical analysis of its significant operations and products in order to deliver safe and effective products to its consumers. The opportunity to gain increased market share, maintain lower insurance premiums and avoid both the high costs of litigation and potential adverse judgments co-exist as tangible benefits.

Trouble arises when a company undertakes self-examination, evaluates or makes a product modification, and litigation still arises from a prior event. The principal issue becomes whether the party bringing suit should have access to any of the information discovered through the self-examination. Or is that information privileged? To date, only a few courts and commentators have considered the application of the self-critical analysis privilege in the product liability context.

HISTORICAL PERSPECTIVES

1. Judicial Review

   Self-critical analysis has developed in the United States over the years as a federal common law privilege based on the application of Federal Rule of Evidence 501, which states:

   Except as otherwise required by the Constitution of the United States or provided by act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of a witness, person, government, state, or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience. However, in civil actions and proceedings with respect to an element of a claim or defense as to which state law supplies the rule of decision, the privilege of a witness, person, government, state, or political subdivision thereof shall be determined in accordance with state law. The privilege is premised on the public policy that frank and potentially damaging self-criticism should be protected from discovery in order to encourage this socially beneficial activity. (1) This is particularly true where businesses seek to review and improve on the safety of its products. The underlying theory is that if discovery is allowed, there may be a "direct chilling effect on the institutional or individual self-analyst; and that this effect operates to discourage the analyst from investigating thoroughly and frankly or even from investigating at all." (2) This concern becomes even more meaningful where corrective measures can only be cultivated from self-examination of the type the privilege is expected to protect.

   Unfortunately, the playing field facing U.S. businesses over the past decade largely has been an uneven landscape. Neither the Constitution, the Congress, nor the U.S. Supreme Court has expressly created a self-critical analysis privilege. The Court's decisions in University of Pennsylvania v. Equal Employment Opportunity Commission (3) and Trammel v. United States (4) indicate that the application of a self-critical analysis privilege should be decided on a case-by-case basis.

   In judicial review, the privilege often falls under severe scrutiny, resulting in its uncertain application, thus thwarting the candor with which such evaluations are intended to be performed and deterring corporations from proceeding with self-critical studies.

   Judicial reluctance to extend the self-critical analysis privilege and the resultant unpredictability of the privilege's application to internal analytical reviews have prompted commentators to advocate proposals for codifying a broad self-critical analysis privilege. (5) However, as is the case with Congress, at the present time there is no state legislation addressing a self-critical privilege in regard to product safety review activities and nothing meaningful under discussion.

2. Development of Privilege

   The self-critical analysis privilege was first recognized in 1970 in the context of a medical malpractice action. In Bredice v. Doctor's Hospital, an administratrix, on behalf of the decedent, sued the hospital for malpractice. The plaintiff moved for the production and inspection of minutes and reports of any board or committee of the hospital or its staff concerning the death of the decedent and of reports, statements or memoranda, including reports to the malpractice insurance carrier pertaining to the deceased or his treatment, no matter when, to whom or by whom made. In essence, the plaintiff was attempting to obtain the minutes of a hospital peer review meeting at which the decedent's care was evaluated.

   The U.S. District Court for the District of Columbia denied access to the minutes, relying on the public policy rationale underlying the self-critical or self-evaluative privilege. The court noted:

   Confidentiality is essential to effective functioning of the staff meetings; and these meetings are essential to the continued improvement of the care and treatment of patients. Candid and conscious evaluation of clinical practices is a sine qua non of adequate hospital care. To subject these discussions and deliberations to the discovery process, without a showing of exceptional necessity, would result in terminating such deliberations. Constructive, professional criticism cannot occur in an atmosphere of tension that one doctor's suggestion will be used as a denunciation of a colleague's conduct in a malpractice suit." (6) The court also noted that the purpose of the hospital's staff meetings was to improve, through self-analysis, the efficiency of medical procedures, techniques and patient care. Without an ability to conduct a retrospective review, the value of these types of meetings would be undermined if they and the names of those participating were to be opened to discovery.

   The Bredice rationale for refusing to disclose the minutes and reports of hospital staff meetings was adopted by the U.S. District Court for the Northern District of Georgia in Banks v. Lockheed-Georgia Co. (7) The Banks court held that disclosure of information concerning a company's candid self-analysis, which evaluated its employment practices and affirmative action compliance programs, would have a discouraging effect on equal employment opportunities.

   The Banks court concluded that "it would be contrary to [public] policy to discourage frank self-criticism and evaluation in the development of affirmative action programs of this kind." The court also relied on the reasoning of Bredice and noted that to allow "access to the written opinions and conclusions of the members of Lockheed's own research team would discourage companies such as Lockheed from making investigations which are calculated to have a positive effect on equalizing employment opportunities."

   Since the self-critical analysis privilege was first recognized judicially in Bredice and Banks, it has been extended to numerous areas including accounting records; (8) securities losses; (9) academic peer reviews; (10) railroad accident investigations; (11) product safety assessments; (12) and products liability. (13)

   The rationale behind applying the self-critical analysis privilege in these situations has essentially been the same: "It allows individuals or businesses to candidly assess compliance with regulatory and legal requirements without creating evidence that may be used against them by their opponents in future litigation." (14)

   A QUALIFIED PRIVILEGE

   In determining whether a self-critical analysis privilege will apply, courts have followed no single rule, test, analysis or evaluation. In fact, it is clear that the self-critical analysis privilege is a qualified one whose application cannot be guaranteed under any circumstances. The three criteria historically considered by courts include:

   * Whether the information resulted from critical self-analysis taken by the parties seeking protection;

   * Whether the public has a strong interest in preserving the free flow of the type of information sought; and

   * Whether the information is of a type whose flow would be curtailed if discovery were not allowed.

   The burden of establishing that these criteria have been meet is on the party seeking to assert the self-critical analysis privilege. Meanwhile, courts also have created numerous limitations and restrictions on the self-critical analysis privilege.

   First, a document generally will not be accorded this privilege unless it was prepared with the expectation that it would be kept confidential and, equally as important, has been kept confidential. This limitation was first enunciated in Dowling v. American Hawaii Cruises. (15) In Dowling, the Ninth Circuit was asked to determine whether the plaintiffs could discover the minutes of meetings of a ship safety committee held prior to a crewman's injury. The ship had asserted that the documents were protected by the self-critical analysis privilege. In addition to applying the three criteria above, the court also considered whether the documents were prepared with the expectation that they be kept confidential.

   The Dowling court ultimately concluded that the documents should not be given the benefit of the self-critical analysis privilege, holding that routine safety inspections would not be curtailed merely because they might be subject to future disclosure. Moreover, the court did not believe that routine safety inspections were normally performed with the expectation that they would be kept confidential. (16)

   Thus, the Dowling court applied a fourth prong to the historical self-critical analysis privilege test by requiring that any self-evaluative documents be created with the intent that they be confidential and be kept confidential. As a consequence, it is often recommended that an evaluator conspicuously mark self-critical documents as confidential and that the internal and external distribution of the documents be limited in order effectively to limit...