SCOPA on Work Product Doctrine and Attorney-Client Privilege

The Supreme Court of Pennsylvania (SCOPA) published a decision addressing the work product doctrine and the attorney-client privilege - BouSamra v. Excela Health. More specifically, the Court analyzed whether a hospital waived either of those protections by forwarding an email from its outside counsel to its "public relations and crisis management consultant." The emails related to an internal investigation of one of the doctors.

It turns out that the two protections require different analysis in this case. Disclosure to a third party does not necessarily waive the work-product doctrine. Instead, SCOPA concluded that

[T]he attorney work product doctrine is not waived by disclosure unless the alleged work product is disclosed to an adversary or disclosed in a manner which significantly increases the likelihood that an adversary or anticipated adversary will obtain it.

The Court then remanded the case back to the trial court to apply this newly articulated standard.

 The attorney-client privilege is different - disclosure to a third party generally does waive that privilege. There are, however, exceptions. Disclosure to certain agents is protected. For example, disclosure to an expert consultant, accountant, or third party interpreter might not waive the privilege.

[If] the client is a corporation, the attorney-client privilege extends to communications between its attorney and agents or employees authorized to act on the corporation’s behalf . . . . [T]he attorney-client privilege is [generally] waived when a confidential communication is shared with a third party . . . . [T]he critical [issue is whether] the third-party’s presence was either indispensable to the lawyer giving legal advice or facilitated the lawyer’s ability to give legal advice to the client.

SCOPA concluded that forwarding the email to a PR firm neither "facilitated [n]or improved the lawyer’s ability to provide legal advice." Thus, the privilege was waived (but, see above, possibly still protected by attorney work product doctrine).

Two important issues for civil litigation attorneys to keep in mind.

Well, at least compensatory and punitive damages are capped in discrimination cases, right? Not so fast, Pennsylvania employers!

What's the worst case scenario in a discrimination claim? In terms of liability, federal discrimination claims under the ADA and Title VII have a statutory cap for compensatory damages (like emotional distress) and punitive damages combined. See, 42 USC s1981a.

It depends on the size of the employer:

• <101 employees: $50,000
• 101 - 200 employees: $100,000
• 201-500 employees: $200,000
• >500 employees: $300,000

In Pennsylvania (and I suspect other jurisdictions as well), plaintiffs can get around that cap by allocating damages to a state discrimination statute.

Not official use.

The PHRA does not allow for punitive damages. Hoy v. Angelone, 720 A.2d 745, 749 (Pa. 1998) But, it allows for unlimited emotional distress damages. Let's say a jury verdict in a sex discrimination case includes:

• $2 million in emotional distress; and 
• $300,000 in punitive damages.

The employer has more than 500 employees. Now, the employer hopes that the $2.3 million gets knocked down to $300,000 (the statutory cap), right! What a relief that would be!

Not so fast! The Court could allocate the emotional
distress to the PHRA claim, and the punitive damages to the Title VII claim. The result would be $2 million for emotional distress under the PHRA, and $300,000 (the statutory cap) in punitive damages under Title VII. Instead of a $300,000 total, the employer is still getting hit with the full $2.3 million total! 

This plaintiff-friendly allocation method received the express approval of the Third Circuit Court of Appeals in Gagliardo v. Connaught Labs., 311 F.3d 565 (3d Cir. 2002). Suddenly, that cap is not quite as useful as many employers think it is.  

SCOTUS: Title VII charge process is procedural, not jurisdictional

Before would-be plaintiffs file employment discrimination lawsuits under Title VII (race, color, sex, religion, and national origin), they must first exhaust their administrative remedies. Put another way, they must go to the U.S. Equal Employment Opportunity Commission (EEOC) and file a charge first.

Today, the Supreme Court issued a unanimous decision, with an opinion from Justice Ginsburg ("Notorious RBG" as the cool kids call her) in Fort Bend County v. Davis:

Is Title VII’s charge-filing precondition to suit a “jurisdictional” requirement that can be raised at any stage of a proceeding; or is it a procedural prescription mandatory if timely raised, but subject to forfeiture if tardily asserted? We hold that Title VII’s charge-filing instruction is not jurisdictional . . . Prerequisites to suit like Title VII’s charge-filing instruction are . . . properly ranked among the array of claim-processing rules that must be timely raised to come into play.

Great. What does that mean?

In short, it means that an employer-defendant in a Title VII case can waive the requirement by not raising it fast enough. In this particular case, the plaintiff had not included "religion" on its EEOC charge, but did include other types of claims (retaliation and sexual harassment). The plaintiff filed a lawsuit based on religious discrimination, retaliation, and sexual harassment. After litigating the case for 3-4 years, all of the claims were dismissed . . . except the religion claim, which was remanded from the appellate court back down to the trial court.

The defendant asked the trail court to dismiss the religion claim because it had never gone through the EEOC charge process. Too late!* The plaintiff can proceed with the religious discrimination claim despite not including it in the EEOC charge. That's the bottom line of today's ruling. 

This sets a particularly tricky trap for employers here in the Third Circuit. On the one hand, Title VII plaintiffs are not required to plead administrative exhaustion with particularity. On the other hand, as of today, defendants can be held to have waived a failure to exhaust administrative remedies defense by not raising it soon enough. Do you see why that creates a problem for employers?

This also creates some side issues, that I have not yet looked into (but probably will have to now!):

• How specific does a defendant need to be to preserve this defense? Does a generic affirmative defense in an Answer ("Plaintiff failed to exhaust administrative remedies") sufficient?

• How late is too late to raise the issue?

 * Actually, the trial court did dismiss the claim, but the 5th Circuit reversed and today SCOTUS sided with the 5th Circuit.