protecting privileged documents

By Kim J. Askew, Partner, Hughes & Luce, LLP

With the 1999 amendments to the Texas Rules of Civil Procedure, it is more important than ever that privileges be properly preserved during the course of litigation. Given the critical role that paralegals and case clerks play in the discovery process, it is important to have a good understanding of privilege issues. This article briefly discusses some of the most frequently encountered privileges, the procedure for properly asserting privileges and preparing privilege logs or withholding statements, proving privileges, and the procedure for handling the inadvertent disclosure of privileged information.           

A. Sources of Privileges

Texas law codifies the privileges most frequently used in litigation in Article V of the Texas Rules of Evidence. Article V covers the attorney client (Rule 503), clergy (rule 505), husband wife (Rule 504), trade secrets (Rule 507), physician patient (Rule 509), and mental health (Rule 510) privileges. Federal privileges are based on common law rather than statutory law, and are recognized under Article V of the Federal Rules of Evidence. Of course, other privileges are available under various state and federal statutes that are too numerous to cover in this article.

Work product, another well known privilege, was codified for the first time in Texas law in December of 1999 in Rule 192.5 of the Texas Rules of Civil Procedure. Texas work product law is similar in many respects to the well-developed body of federal common law based on Hickman v. Taylor, 329 U.S. 495 (1947).

B. The Attorney Client Privilege

This granddaddy of privileges is one of the oldest privileges recognized under Texas law. Ford Motor Co. v Leggat, 904 S.W.2d 643 (Tex. 1995). The attorney client privilege is absolute, is not subject to the substantial need and hardship exceptions, is not limited to communications made in anticipation of litigation, and even continues after the death of the client. Swidler & Berlin v. United States, 524 U.S. 399 (1998); In re Texas Farmers Ins. Exch., 990 S.W.2d 337 (Tex. App.—Texarkana 1999, leave denied). This privilege is broad enough to cover preliminary confidential communications between a lawyer and potential client before the lawyer is retained in a matter. In re Texas Farmers Ins. Exch., 990 S.W.2d 337, 340 (Tex. App.—Texarkana 1999, leave denied).

Under Tex. R. Evid. 503 and federal law, the attorney client privilege protects: (a) confidential communications, (b) between a lawyer or the representative of a lawyer and the client, (c) in which legal advice is sought or rendered. Importantly, when a paralegal is acting as a lawyer’s representative in communicating with a client, those communications may be privileged.

Some of the most interesting issues arise in determining whether a particular communication is covered by the attorney client privilege. Federal law has long determined the applicability of the attorney client privilege under the “subject matter” test of Upjohn Co. v. United States, 449 U.S. 383 (1981). In 1998, Texas adopted the subject matter test in determining the applicability of the attorney client privilege. This was an important amendment to Tex. R. Evid. 503 because the substantially narrower test “control group” test of National Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993) was rejected in favor of the broader “subject matter” test that gives greater protection to clients in defining the scope of the privilege. Texas state and federal courts broadly define “clients” to include corporations, other governmental organizations and bodies, and any person or entity that seeks legal advice from a lawyer. Hart v. Gossum, 995 S.W.2d 958 (Tex. App.—Fort Worth 1999, orig. proceeding).

The attorney client privilege applies only to a “confidential communication.”  A communication is confidential if it is not disclosed or intended to be disclosed to third persons other than those to whom disclosure is made in connection with the rendition of legal advice. Tex. R. Civ. P. 503(a)(5); In re Auclair, 961 F.2d 65 (5th Cir. 1992); Carmona v. State, 947 S.W.2d 661 (Tex. App.—Austin 1997, no writ). Otherwise discoverable documents or communications do not magically become confidential or otherwise privileged simply because they are provided to a lawyer. Smith v. Texaco, 186 F.R.D. 354 (E. D. Tex. 1999).

Lawyers wear many hats and all communications with a lawyer are not privileged. As In re Texas Farmers Insurance Exchange, 990 S.W.2d 337 (Tex. App.—Texarkana 1999, leave denied), makes clear, a lawyer must be acting as a lawyer or the client must believe the lawyer in acting as a lawyer in connection with the rendition of legal advice. Being a lawyer is simply not enough—the lawyer must act as a lawyer in order to claim the benefit of the privilege.

C. The Work Product Privilege

As of December 1, 1999, Tex. R. Civ. P. 192.5 defines work product as communications, materials prepared and mental impressions developed in anticipation of litigation or for trial by or for a party or a party’s representatives. Representatives include attorneys, consultants, insurers, agents and employees. Continuing protection is provided to those materials when prepared in anticipation of litigation. Certain items are exempted from the work product privilege such as trial exhibits, photographs, the identity of persons with knowledge of relevant facts, and witness statements. Tex. R. Civ. P. 192.5(c).

“Core” work product under Tex. R. Civ. P. 192.5(b)(1), composed of an attorney’s mental impressions, opinions, conclusions or legal theories is absolute and not discoverable, while “non core” or “other” work product may be discoverable upon a showing of substantial need or undue hardship. Tex. R. Civ. P. 192.5(b)(2). Like Rule 26(b)(3) of the Federal Rules of Civil Procedure, Tex. R. Civ. P. 192.5 covers all work product, whether it constitutes core or non-core or was prepared by the client or the client’s lawyer or representative.

Federal Rule 26(b)(3) requires that materials be “prepared in anticipation of litigation” in order to qualify under the work product privilege. As long as materials are prepared with an “eye toward litigation,” litigation need not have actually commenced in order for information to be considered work product. Hickman v. Taylor, 329 U.S. at 511. Like Texas courts, the federal test is a flexible one that the courts apply on a case-by-case basis.

Importantly, unlike the attorney client privilege, both the lawyer and the client hold the work product privilege, and either may assert it. Waiver by the client of work product does not deprive the attorney of the right to assert the privilege and vice versa. In re Grand Jury Proceedings, 43 F.2d 966 (5th Cir. 1994).

D. Asserting A Privilege

A party no longer objects to assert a privilege under Texas law. Tex. R. Civ. P. 193.2(f). Under Rule 193.3(a), one asserts a privilege by (a) withholding the privileged information, (b) stating that responsive information has been withheld and identify the request to which the information relates, and (c) identifying the privileges asserted. The key is to always identify the withheld information and to assert the privilege in writing.

Fed. R. Civ. P. 26(b)(5) provides wide flexibility to federal courts in determining whether a privilege is properly asserted. A party must (a) withhold the privileged information, (b) state the privilege, and (c) describe the nature of the privileged information without revealing the privileged information. Whether in federal or state court, a blanket assertion of a privilege is not enough to preserve a privilege. William v. City of Dallas, 178 F.R.D 103 (N.D. Tex. 1998).

E. Privilege Logs

Texas law now follows the federal practice of using a privilege log or “withholding statement” to identify withheld privileged documents. A privilege log is required only after the discovering party requests it. Tex. R. Civ. P. 193.3(b). While a party must produce a privilege log within 15 days after receiving a request, the better practice is to prepare a privilege log when one is preparing discovery responses. Also, it is a good practice to always send a request for a privilege log once a party receives discovery responses asserting a privilege because the withholding party has no duty to prepare or present a privilege log absent such a request. The request for a privilege log can be in any form, but it must be in writing. Tex. R. Civ. P. 193.3(b).

Courts will review privilege logs to analyze privileged documents and frequently use them in connection with in camera reviews. Williams v. City of Dallas, 178 F.R.D. 103 (N.D. Tex. 1998); In re Monsanto, 998 S.W.2d 917 (Tex. App.—Waco 1999, orig. proceeding). It is not simply enough to list documents in a privilege log. A party must provide enough information in a privilege  log to permit the courts to determine the applicability of the privilege asserted. Varo, Inc. v. Litton Systems, Inc., 129 F.R.D. 139 (N.D. Tex. 1989).

A well-prepared privilege log contains (a) a description of the privileged information without revealing information sufficient to waive the privilege, (b) the identity of the attorney or attorney’s representative that makes the information privileged, (c) dates, if available, and (d) the privilege asserted (e.g. attorney client, work product, husband wife). In re Monsanto, 998 S.W.2d at 926-31; Varo, 129 F.R.D. at 142. To avoid waiver issues, never include in the privilege log the nature of the confidential advice given or any portion of the privileged information. To be safe, always ask a lawyer to review a privilege log before it is served upon opposing counsel or filed with a court.

F. Hearings on Privileged Documents

After a privilege is asserted and a privilege log exchanged, any party may request a hearing on the privileges asserted. Tex. R. Civ. P. 193.4(a); In re Monsanto, 998 S.W.2d at 925. Indeed, if a party seeks the discovery of the information in which a privilege is asserted, a party must seek a hearing to resolve the privilege issues. The withholding party does not need to request a hearing to preserve a privilege. Tex. R. Civ. P. 193.4(b). Don’t wait or delay if your client wants to get behind an assertion of privilege—seek a hearing.

These are numerous ways to prove a privilege at a hearing: (a) live testimony from witnesses; (b) affidavits on file at least 7 days before the hearing in state court and (c) a review of documents in camera or in connection with a privilege log. Tex. R. Civ. P. 193.4(a); In re WHMC, 996 S.W.2d 409 (Tex. App.—Houston [14th Dist.] 1999, n. pet. h.). If a court overrules a claim of privilege, a party then has 30 days to produce the requested information. Tex. R. Civ. P. 193.4(b). Determine whether appellate review will be sought before privileged documents are produced after a court rules on a claim of privilege. Courts will frequently review by mandamus trial court orders that require the production of privileged documents. Walker v. Packer, 827 S.W.2d 833 (Tex. 1992). Be aware that lawyers have been disqualified from a case after reviewing privilege documents that a trial court ordered produced after the trial court’s order was reversed on appeal and the lawyer had seen the privileged information. In re Bank of America, N.A., No. 01-00-00944-CV, 2001 WL 301381 (Tex. App.—Houston [1st Dist.], Mar. 27, 2001.)

Courts use the in camera process to review privileged documents, and the production of the actual documents in camera is often the best means of proving a privilege.  In re Monsanto, 998 S.W.2d at 929. If documents are filed for a court’s in camera inspection, a party must specify the particular documents that it wants the court to review in evaluating the assertion of privilege. Id; Varo, 129 F.R.D at 142, n. 4. Importantly, the in camera documents should be segregated and produced in a sealed wrapper—protect the documents. Tex. R. Civ P. 193.4(a). Courts will not review volumes of unspecified documents in order to assess the applicability of a privilege. The withholding party meets its burden of proving the privilege by providing specific and well-identified information to the court. Batesstamp numbers are very useful in this process. A party seeking the discovery of privileged information must be prepared to show why a particular privilege is not applicable, but the burden of proof always remains with the party asserting the privilege to prove it. In re Valero Energy Corp., 973 S.W.2d 453 (Tex. App.—Houston [14th Dist.] 1998, no pet.)

G. Waivers

A party waives a privilege if it fails to assert the privilege when privileged information is sought in any proceeding. Smith v. Texaco, Inc. 186 F.R.D. 354 (E. D. Tex. 1999). Waivers may also occur if: (a) a blanket assertion of privilege is made, (b) the procedures for asserting a privilege are not followed, or (c) the privileged information is disclosed or communicated to third parties.

H. Handling Inadvertent Waivers of Privileged Documents

Tex. R. Civ. P. 193.3(d) now provides a procedure for handling privileged information that is inadvertently disclosed or produced. If a party discovers that it has produced privileged information, the procedure for remedying the production is simple: (a) amend the response in which the privileged document was produced to assert a privilege using the procedures of Tex. R. Civ. P. 193.3, and (b) identify the privileged document. All copies of the privileged documents must be returned to the producing party until a court rules on the issues of privilege or waiver. While a court may find a waiver, following this procedure is good evidence that the production was inadvertent.

Kim J. Askew is a partner at Hughes & Luce where she focuses her practice on complex commercial litigation and employment cases. She is currently a member of the firm's Management Committee, a Director of the State Bar of Texas, a member of the Council of the Section of Litigation of the American Bar Association, and Chair of the Litigation Section of the State Bar of Texas.

She is a nationally recognized writer and lecturer on discovery, trial practice, evidence, and labor and employment law topics.