A recent District of Colorado decision, A.H. ex rel. Hadijah v. Evenflo, (May 31, 2012), dealt with the issue of whether communications with a public relations firm are privileged under Colorado law.
For the most part, the involvement of a third party to otherwise attorney-client privileged communications destroys the privileged nature of those communications—beit an inadvertent or voluntary disclosure. However, particularly in the context of high-profile litigation which receives much national attention, defendant companies routinely hire a public relations firm to assist in managing the defendant’s public image in the face of litigation, including assisting in any potential product recall efforts.
The issue of extending the attorney-client privilege to public relations firms and other third party consultants has received much attention over the past decade or so in the various courts of New York. The Southern District of New York court in In Re Copper Market Antitrust Litigation, 200 F.R.D. 213, an often cited case, applied the “functional equivalent” test for PR firms—meaning was the public relations firm the functional equivalent of an employee. If so, then communications with the public relations firm were privileged. This same district later took a slightly different approach and looked at who hired the public relations firm—the attorneys or the client—and/or what was the purpose behind hiring the public relations firm. In In Re Grand Jury Subpoenas, 265 F.Supp.2d 321, the Southern District of New York held that “that (1) confidential communications (2) between lawyers and public relations consultants (3) hired by the lawyers to assist them in dealing with the media in cases such as this (4) that are made for the purpose of giving or receiving advice (5) directed at handling the client’s legal problems are protected by the attorney-client privilege.” (At the link is an interesting article reviewing the various treatments of third party consultants in the state of New York.)
The District of Colorado had previously adopted the “functional equivalent” test as to “whether to extend the attorney-client privilege to third parties acting at the behest of a client or their attorney”, citing Horton v. U.S., (2002). (The Supreme Court of Colorado also did so in Alliance Const. Solutions, Inc. v. Dept. of Corr., (2002)) The Evenflo court cited to the “functional equivalent” test used by the Southern District of New York but it unclear whether this was in fact the test used by the Colorado district court:
(1) “whether the consultant had primary responsibility for a key corporate job,” (2) “whether there was a continuous and close working relationship between the consultant and the company’s principals on matters critical to the company’s position in litigation,” and (3) “whether the consultant is likely to possess information possessed by no one else at the company.
Turning to the communications at issue in Evenflo, the district court reviewed the nature of Evenflo’s interactions with the public relations firm, Zeno Group. Zeno was hired by Evenflo “to work with its counsel and provide advice regarding the recall/retrofit campaign.” Since Evenflo did not have an internal public relations department, Zeno served as a “functional equivalent” to an internal PR department. Zeno prepared communications regarding the recall and prepared press releases and communications to the public, incorporating “input from Evenflo’s officers, employees and counsel in the proposed communications.”
According to the Evenflo court, the “…application of the attorney-client privilege [can] be extended to non-employees, however, the party asserting the privilege must make a detailed factual showing that the non-employee is the functional equivalent of an employee and that the information sought from the non-employee would be subject to the attorney-client privilege if he were an employee of the party.” Using this standard, the court found most of the communications to be privileged:
Based on the facts of this case, the Court finds that there is no principled reason to deny attorney-client protection to communications involving employees of Zeno Group with Evenflo’s legal counsel that in camera review reveals were primarily or predominately of a legal character and therefore would be considered privileged attorney-client communications if Mr. Armstrong, Mr. Waterman, or Ms. Pellegrino were technically employees of Evenflo. Therefore, this court finds that communications involving the Zeno Group employees are entitled to the same attorney-client protection had the Zeno Group employees actually been Evenflo employees and the privilege has not been waived by their inclusion in several of the protected communications.
That being said, the court however did find that two documents were not protected by the attorney-client privilege—which offers some caution as to how far this “functional equivalent” test will be applied. The first was an e-mail where no attorney was even included in the transmission. As the court stated, even if an attorney had been involved with the drafting of the e-mail at some point, the communication did not contain “confidential matters communicated by or to the client in the course of gaining counsel, advice, or direction with respect to the client’s rights or obligations.” Regarding the second item referenced by the court, while the initial e-mail in a string of e-mails was found to be protected by the attorney-client privilege, the subsequent e-mails in the string were not privileged:
However, beyond the original message in the email, the communication merely forwards a series of communications which are not subject to attorney-client privilege. The attorney-client privilege only protects disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney.
As the court summed up simply: a party cannot conceal facts subject to discovery merely by revealing them to its lawyer.
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