MEMORANDUM
TO: Monica Hill, Hill & LaFlame
FROM: Parth Kalaria, Hill & LaFlame
DATE: November 21, 2018
SUBJECT: Third-Party Agent of Attorney on Emails and Waiver of Attorney-Client Privilege
QUESTION PRESENTED
Under New York Law, are the documents challenged by Eric Bronkman’s counsel, Bernard Gilfile, protected by the attorney-client privilege? Additionally, does including Raviga Political Consultants, a third-party agent of attorney, on the emails waive attorney-client privilege?
SHORT ANSWER
Most likely no. The documents challenged by Gilfile are not protected by the attorney-client privilege as privilege is waived in this case. Using the standard two-prong test to evaluate the third-party agency exception to waiver of attorney-client privilege, for which both prongs must be satisfied, there appears to be a reasonable expectation of confidentiality under the circumstances, however the disclosure to the third party appears to not be necessary for the client to obtain informed legal advice.
The reasonable expectation of confidentiality under the circumstances stems from a logical belief that these emails were regarding work with a political consultancy, an entity that is presumed to have a certain degree of confidentiality and secrecy with its operations. However, it does not seem that disclosure in this case was a requirement for the client to obtain informed legal advice, because the interpreter justification is not warranted, and the disclosure was merely useful as opposed to necessary. Thus, Bernard Gilfile is likely entitled to the relevant documents on the privilege log since the attorney-client privilege appears to be waived in this scenario.
STATEMENT OF FACTS
In January of 2018, our client, Jared Dunne, the CEO of social media company, Chatter LLC and a candidate for governor of New York, was sued along with his company in New York state court by journalist Eric Bronkman. The complaint made by the plaintiff in this lawsuit alleges that Dunne’s response to an article published by Bronkman constitutes defamation through mentioning that he had been subjected to an IRS investigation and previously sought treatment for drug addiction
As part of the discovery in this case, Bronkman v. Dunne, Bronkman made a sizeable request for discovery production. However, our response to this request involved a determination that some of the documents responsive to Bronkman’s discovery were protected from disclosure by attorney-client privilege. These documents were itemized on a privilege log, which was produced as a part of discovery.
Unfortunately, Bronkman’s counsel, Bernard Gilfile, called us to challenge two of the documents on the privilege log. The documents in question are those labeled CH007744 and CH099998-CH099999, which consist of a series of emails concerning the litigation and Dunne’s campaign for governor. Gilfile’s argument is that attorney-client privilege was waived in this case when the emails were shared with Raviga Political Consultants, a-third party. Gilfile has given us one week to produce these documents, or else he will file a motion to compel their production.
DISCUSSION
Courts typically use a two-prong test to evaluate the third-party agency exception to waiver of attorney-client privilege, for which both prongs must be satisfied. An exception exists where “communications [are] made to counsel through a hired interpreter, or one serving as an agent of either attorney or client to facilitate communication.” People v. Osorio, 75 N.Y.2d 80, 84. While the scope of this exception “is not to be defined by a third party’s employment or function,” the party asserting the agency exception must show: “(1) . . . a reasonable expectation of confidentiality under the circumstances, and (2) [that] disclosure to the third party was necessary for the client to obtain informed legal advice.” Given that both prongs of the test must be satisfied for the exception to exist, we do not believe that attorney-client privilege will be protected in this scenario. Id. at 84.
I. Prong 1: There Exists a Reasonable Expectation of Confidentiality
A. Overview to Reasonable Expectation of Confidentiality
In order to access the agency exception and avoid the waiver, there must exist a reasonable expectation of confidentiality under the circumstances.” People v. Osorio, 75 N.Y.2d 80, 84. Additionally, a formal agency relationship between the client and third party is not a requirement. See Magee v. Paul Revere Life Insurance Company, 172 F.R.D. 627, 638 (E.D.N.Y. 1997); Village of Kiryas Joel Local Development Corp. v. Insurance Company of North America, 1992 U.S. Dist. LEXIS 405, *8, 1992 WL 8207, *3 (S.D.N.Y. Jan. 16, 1992); Osorio, 75 N.Y.2d at 84, 550 N.Y.S.2d at 615 (“the scope of the privilege is not defined by the third parties’ employment or function [*12] . . . .”). Nevertheless, the circumstances forming the foundation of the relationship between the third party and client, must demonstrate a reasonable expectation of confidentiality.
B. Discussion of Role of Raviga Political Consultants
Regarding the confidentiality element, “[a] client’s subjective belief that an attorney-client communication will remain confidential is ordinarily necessary to sustain the privilege, but a mere expectation alone is not sufficient”; it must also be reasonable. Nat’l Educ. Training Grp., Inc. v. Skillsoft Corp., 1999 U.S. Dist. LEXIS 8680, 1999 WL 378337, *4 (S.D.N.Y. 1999); see also Ross v. UKI Ltd., 2004 U.S. Dist. LEXIS 483, 2004 WL 67221, *3 (S.D.N.Y. 2004) (“[t]hough a formal agency relationship is not required, the relationship between the client and the third party must be sufficiently close that the client’s subjective expectation of confidentiality is reasonable”).
Looking at our specific case, the work of Raviga Political Consultants makes it so that the relationship between Raviga and its clients are always sufficiently close to establish a subjective expectation of confidentiality. It is doubtful anyone is hiring a political consultancy with the expectation that their communications with such a firm will be public knowledge. Moreover, one may argue that the circumstances here further justify confidentiality since our client, Dunne, is a candidate for governor of New York. Hiring Raviga here further justifies confidentiality because campaigns are inherently secretive processes given that nobody wants to give away campaign secrets out of fear of losing the election.
II. Prong 2: The Disclosure was Not Necessary to Obtain Informed Legal Advice
A. Elaboration of Necessity Element
“[T]he ‘necessity’ element means more than just useful and convenient, but rather requires that the involvement of the third party be nearly indispensable or serve some specialized purpose in facilitating the attorney-client communications.” Nat’l Educ. Training Grp., Inc., 1999 U.S. Dist. LEXIS 8680, 1999 WL 378337, at *4 (citing cases); accord Don, 19 Misc. 3d 1139[A], 866 N.Y.S.2d 91, 2008 NY Slip Op 51071[U], 2008 WL 2229743, at *5. [**23] “Thus, where the third party’s presence is merely useful but not necessary, the privilege is lost.” Allied Irish Banks, P.L.C. v. Bank of Am., N.A., 240 F.R.D. 96, 104 (S.D.N.Y. 2007) (citation and internal quotation marks omitted).
Kovel provides insight into the accountant justification, whereby privilege can protect communications between a client and his accountant where the accountant’s role is to clarify and improve the comprehension of the communications between attorney and client. United States v. Kovel, 296 F.2d 918, 922 (2d Cir. 1961) (Friendly, J.) As the Second Circuit recently explained in United States v. Ackert, 169 F.3d 136 (2d Cir. 1999), “Kovel recognized that an accountant can play a role analogous to that of an interpreter in helping the attorney understand financial information passed to the attorney by the client.” Ackert, 169 F.3d at 139.
B. Example of Necessary Agent Communication
Ross v. UKI Ltd. provides an example of necessary agent communication that meets the standard required. Ross v. UKI Ltd., 2004 U.S. Dist. LEXIS 483, 2004 WL 67221, *3 (S.D.N.Y. 2004). Specifically, the presence of a financial services contractor and accountant and at a meeting where the counsel gave legal advice about the tax consequences of real estate deals did not waive attorney-client privilege under New York law with regard to the summary meeting document. This is simply because the contractor present was a necessary adjunct to the client and in the transactions, and the accountant present was a representative of an accounting firm that had regularly provided tax accounting services for client and was regularly included in discussions with counsel. Distinct from our current scenario, this meets the fairly high standard for necessity in dealing with third-party agents.
C. Example of Failure to Prove Necessity
On the other hand, there exist examples of failure to prove necessity, which I argue parallel the situation here. Egiazaryan’s assertion of attorney-client privilege must be denied as to attorney-client communications shared with BGR because he has failed to establish that the privilege was not waived. Specifically, Egiazaryan has been unsuccessful in demonstrating that BGR’s participation in discussion regarding legal strategy was “nearly indispensable” or otherwise necessary to facilitate his communications with his attorneys. While BGR was retained to “[d]evelop a set of key messages and compelling narrative in support of the legal cases,” BGR Agreement at 1, and “participate[] in the development of legal strategy,” Cohen Decl ¶ 4, Egiazaryan has not shown that BGR’s involvement was necessary to facilitate communications between himself and his counsel, as in the case of a translator or an accountant clarifying communications between an attorney and client, see Osorio, 75 N.Y.2d at 84 (citing United States v. Kovel, 296 F.2d 918, 921-22 (2d Cir. 1961)).
Additionally, in Egiazaryan, communications between a former Russian politician and his public relations firm were not protected by attorney-client privilege, on basis of the agency exception, in a later suit brought against former Russian politician for violations of strategic lawsuit against public participation (anti-SLAPP) provisions, even though public relations firm was assisting his counsel with a media campaign. Egiazaryan v. Zalmayev, 2011 U.S. Dist. LEXIS 140851 (S.D.N.Y. Dec. 6, 2011). Instead, the former Russian politician waived any attorney-client privilege arising from documents provided to the firm since the public relations firm’s involvement was not necessary to facilitate communications between the client and his counsel, and coordination of media campaign did not constitute legal advice. This scenario better mirrors the one we currently face due to the shared presence of a political campaign.
D. Public Relations Professionals Not Covered by Attorney-Client Privilege
The case of People v. Osorio details the scope of privilege, further explaining that “Communications made to counsel through hired interpreter, or through one serving as agent of either attorney or client to facilitate communication, generally will be privileged; however, scope of privilege depends on whether client had reasonable expectation of privacy, not on the third party’s employment or function.” People v. Osorio, 75 N.Y.2d at 84. This means that the third party does not have to take on one specific role to meet the requirements of the privilege.
It is interesting to note the parallel between our current case and existing case law discussing attorney-client communications with public relations firms. Federal judges typically apply New York privilege law to include attorney communications with public relations firms within the agency exception to the rule that non-party communication constitutes a waiver of attorney-client privilege.
In re Grand Jury Subpoenas dated March 24, 2003 involved a public relations firm that was retained by lawyers to help them create favorable publicity during the time of a high-profile grand jury investigation. In re Grand Jury Subpoenas Dated March 24, 2003, 265 F. Supp. 2d 321 (S.D.N.Y. 2003). The goal here was to lessen pressure on prosecutors to obtain an indictment. Therefore, the public relations function performed here was described as a “lawyer’s public advocacy on behalf of the client,” id. at 329. More importantly, the function was deemed necessary to achieve a goal of litigation. The court concluded “the assertion of the privilege could be justified only if the communications involving the public relations consultants would either promote “observance of laws” or “the administration of justice.” See id. at 329-30.
Conclusion
The documents challenged by Bernard Gilfile are most likely not protected by attorney-client privilege since privilege is waived here. The scenario in this case unfortunately does not satisfy both prongs of the standard two-prong test to evaluate the third-party agency exception to waiver of attorney-client privilege. While there exists a reasonable expectation of confidentiality under the circumstances, there does not exist a necessity of disclosure for the client to obtain informed legal advice.