Keeping Internal Investigations (and Other Communications) Privileged

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Dennis Burke is the well-known surgeon who blew the whistle on a surgical practice at the Massachusetts General Hospital known as “concurrent surgery” or “double booking.” After Dr. Burke publicized that practice, MGH engaged attorney Donald Stern to investigate the matter, which led to the Stern Report. MGH also terminated Dr. Burke, who then sued the hospital, claiming that he was fired in retaliation for publicizing its concurrent surgery practices. As part of his discovery in that case, Dr. Burke sought the contents of the Stern Report, and the hospital resisted, claiming, among other things, that the Stern Report was protected from disclosure by the attorney-client privilege. The Superior Court ultimately disagreed, however, and, although the case settled while that decision was on appeal, the Superior Court’s analysis (available at 2019 WL 6197040) provides a variety of points that should be of interest to any in-house counsel who is concerned about keeping internal investigations (and other communications) confidential.

First, while MGH asserted that the Stern Report was privileged, the Court focused on two factors to repudiate that assertion: (i) the engagement letter with Attorney Stern did not indicate that any report authored by Attorney Stern would be imbued with legal advice, and (ii) the deposition testimony of the Chair of the MGH Board indicated that she viewed Attorney Stern as an independent investigator and not as part of the legal team. Thus, any in-house counsel commissioning an investigation in the future should make sure that the engagement letter with outside counsel is carefully worded and also be clear with any business people who will interact with or view the investigative report that it is legal advice.

Second, even if the Stern Report was privileged, Dr. Burke argued that because MGH disclosed an unredacted version of its to a public relations firm for the purpose of affecting public perception, the privilege had been waived. While the Court noted that there may have been specific communications between counsel for MGH and the public relations firm that were privileged, that did not cloak the Stern Report with such protection, and the disclosure of the Stern Report to that firm was a waiver. The lesson here is that you cannot use the privilege as a shield and a sword. While there may be important reasons to disclose to third parties privileged materials, in-house counsel should balance this against the risk that such information may very well lose its protection from disclosure in the future.

Finally, an unredacted copy of the Stern Report also was found on the computer server of Simmons College, where MGH’s Board Chair worked. Accordingly, the Court found this to be another waiver of any privilege that might have existed. As such, it is crucial for in-house counsel to be aware, and make other relevant people aware, that a privileged communication likely will lose its protection if sent to a client representative at a non-company and non-private email address.

In sum, establishing the attorney-client privilege sometimes can be impacted by how a situation is positioned, and waiving the privilege almost always is within your control. As such, and as the above examples confirm, a little forethought in this regard can result in the elimination of a lot of future risk.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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