Journal of American Law

SPRING 2015

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Spring 2015 // Journal of American Law 35 attorney in the course of a professional relationship and made in confdence is aforded protection. 3 California's attorney-cli- ent privilege protects confdential communications between a client and his or her attorney made in the course of an attor- ney-client relationship. 4 Te pivotal case analyzing attorney-client privilege in corporate communications is the U.S. Supreme Court's deci- sion in Upjohn Co. v. United States. 5 In Upjohn, the court stat- ed that the purpose of the privilege "is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice." 6 Te privilege protects "disclosure of communications; it does not protect disclosure of the underlying facts by those who communicated with the attorney." 7 Te burden of establishing the applicability of the privilege rests with the party invoking it. 8 "To sustain a claim of privilege, the party invoking it must demonstrate that the information at issue was a communication between client and counsel or his employee, that it was intended to be and was, in fact, kept confdential, and that it was made in order to as- sist in obtaining or providing legal advice or services to the client." 9 However, the attorney-client privilege applies to com- munications with counsel only if the client is requesting legal advice and not business advice. 10 Te attorney-client privilege does not apply without qualifcation where the attorney is merely acting as a negotiator for the client, or merely gives business advice, or is merely acting as a trustee for the client. 11 Privilege and Coverage opinions More and more, courts are resolving the question of whether a coverage opinion prepared by counsel is protected by the at- torney-client privilege by conducting an analysis to determine whether the opinion or report was prepared solely for the purposes of rendering legal advice. If, for example, the opin- ion was prepared to assist the insurance company in making claims decisions in the ordinary course of the insurance com- pany's business or if the attorney was acting in an investigato- 3 N.J. STAT. ANN. §§ 2A:84A-20 (West 2013); N.J. R. Evid. 504(1). 4 Cal Evid. Code § 954. 5 449 U.S. 383 (1981). 6 Id. at 389. 7 Id. at 396. 8 In re Grand Jury Proceedings, 219 F.3d 175, 182 (2d Cir. 2000). 9 Bowne of NYC, Inc. v. AmBase Corp., 150 F.R.D. 465, 475 (S.D.N.Y. 1993). 10 Upjohn, 449 U.S. at 394; Munich Reinsurance Am. Inc. v. Am. Nat'l Ins. Co., No. 09–6435 (FLW), 2011 U.S. Dist. LEXIS 41826, at *56 (D.N.J. April 18, 2011) (internal citations omitted); TVT Records v. Island Def Jam Music Grp., 214 F.R.D. 143, 144 (S.D.N.Y. 2003); People v. Belge, 59 A.D.2d 307, 309 (4th Dep't 1977). 11 Aetna Cas. & Sur. Co. v. Superior Court, 153 Cal. App. 3d 467, 470 (1984) (internal citations omitted). ry capacity, it will not be protected. 12 In determining questions of privilege, the courts look to see what the primary or domi- nant purpose of the attorney's work was in order to determine whether it is protected by the attorney-client privilege. In New Jersey, the courts look to the purpose of the cover- age opinion to determine whether it is protected by the attor- ney-client privilege. 13 When an attorney acts for an insurance company as an investigator of the facts, his communications with the carrier are not privileged. 14 But when the insurer re- tains a lawyer in a traditional role as legal consultant, the priv- ilege persists even though the insurer may be in the midst of investigating the claim prior to any threat of litigation. 15 New York courts also look to the "predominant purpose" of the opinions rendered by coverage counsel. 16 As the court held in 105 Street Associates LLC v. Greenwich Ins. Co., 17 where, in a communication with the carrier, the attorney specifes facts relating to the claim under consideration, the communi- cation does not lose its privileged status as long as those facts are presented as an adjunct or foundation to the attorney's legal analysis or advice. Tus, "[a]lthough '[i]n the context of insurance litigation, attorney-client communications have been denied protection when it appears the attorney is merely investigating a claim on a policy...when such communications relate to legal advice, they do not lose the protection of the attorney-client privilege simply because they involve an insur- 12 First Aviation Serv. Inc. v. Gulf Ins. Co., 205 F.R.D. 65, 69 (D. Conn. 2001) ("An insurance company may not insulate itself from discovery by hiring an attorney to conduct ordinary claims investigations."). 13 See Friedman Route 10 LLC v. Certain Underwriters at Lloyd's, London, No. A-0434-13T1, 2014 N.J. Super. Unpub. LEXIS 191, at *11 (N.J. Super. Ct. App.Div. Jan. 31, 2014) (the court looked at whether Lloyd's purpose was to solicit legal advice from coverage counsel, which would protect the coverage opinions under the attorney-client privilege, or whether Lloyd's merely sought to secure business advice or other nonlegal services, which would require disclosure); see also Munich Reinsurance Am., No. 09- 6435 (FLW), 2011 U.S. Dist. LEXIS 41826, at *85 (although the case applies New York law to resolve the question of attorney-cli- ent privilege, the court also analyzes attorney-client privilege cases from the District of New Jersey, fnding that "the policy behind the attorney-client privilege is best upheld where the attorney-cli- ent relationship is predominantly for the purpose of rendering legal services") (internal citations omitted). 14 See Friedman Route 10, No. A-0434-13T1, 2014 N.J. Super. Unpub. LEXIS 191 at *11. 15 Id. at *11. 16 See All Waste Systems, Inc. v. Gulf Ins. Co., 295 A.D.2d 379 (2d Dept. 2002); see also Rossi v. Blue Cross & Blue Shield of Greater N.Y. , 73 N.Y.2d 588, 594 (N.Y. 1989) ("So long as the commu- nication is primarily or predominantly of a legal character, the privilege is not lost merely by reason of the fact that it also refers to certain nonlegal matters."). 17 105 St. Assocs., LLC v. Greenwich Ins. Co., No. 05 Civ. 9938 (VM) (DF) , 2006 U.S. Dist. LEXIS 81717, at *14-15 (S.D.N.Y. Nov. 7, 2006).

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