1995 Decisions

Opinions of the United

States Court of Appeals

for the Third Circuit

5-23-1995

Glenmede Trust v Thompson

Precedential or Non-Precedential:

Docket 94-2189

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Recommended Citation

"Glenmede Trust v Thompson" (1995). 1995 Decisions. Paper 139.

http://digitalcommons.law.villanova.edu/thirdcircuit_1995/139
 UNITED STATES COURT OF APPEALS 

 FOR THE THIRD CIRCUIT 

 ___________ 

 No. 94-2189 

 ___________ 

 GLENMEDE TRUST COMPANY; 

 PEPPER, HAMILTON & SCHEETZ, 

 Petitioners 

 vs. 

 B. RAY THOMPSON, JR.; JUANNE J. THOMPSON; 

 CATHERINE V. THOMPSON; ADELLA S. THOMPSON; 

 B. RAY THOMPSON, III; SARAH THOMPSON TARVER; 

 REBEKAH L. THOMPSON; B. RAY THOMPSON, JR., AS 

 TRUSTEE OF FIVE THOMPSON FAMILY TRUSTS; 

 JUANNE J. THOMPSON, AS TRUSTEE OF FIVE THOMPSON 

 FAMILY TRUSTS; DALE A. KEASLING, AS TRUSTEE OF 

 FIVE THOMPSON FAMILY TRUSTS, 

 Respondents 

 vs. 

 THE HONORABLE HERBERT J. HUTTON, UNITED 

 STATES DISTRICT JUDGE, 

 Nominal Respondent 

 ___________ 

 Appeal from the United States District Court 

 for the Eastern District of Pennsylvania 

 (D.C. Civ No. 92-cv-05233) 

 ___________ 

 

Argued 

 March 29, 1995 

 Before: MANSMANN, COWEN and LEWIS, Circuit Judges. 

 (Filed May 23 , 1995) 

 ___________ 

William A. Slaughter, Esquire 

Alan J. Davis, Esquire (ARGUED) 

Ballard, Spahr, Andrews & 

 Ingersoll 

1735 Market Street 
51st Floor 

Philadelphia, PA 19103 

 COUNSEL FOR PETITIONER GLENMEDE TRUST COMPANY 

William T. Hangley, Esquire (ARGUED) 

Sara M. Staman, Esquire 

Hangley, Aronchick, Segal & Pudlin 

One Logan Square 

Philadelphia, PA 19103 

 COUNSEL FOR PETITIONER PEPPER, HAMILTON & SCHEETZ 

Michael C. Spencer, Esquire (ARGUED) 

Milberg, Weiss, Bershad, 

Hynes & Lerach 

One Pennsylvania Plaza 

49th Floor 

New York, NY 10119 

James J. Binns, Esquire 

James J. Binns, P.A. 

The Mellon Bank Center, 39th Floor 

1735 Market Street 

Philadelphia, PA 19103 

 COUNSEL FOR RESPONDENTS 

 ___________ 

 OPINION OF THE COURT 

 __________ 

MANSMANN, Circuit Judge. 

 Before us is a Petition for Writ of Mandamus filed by a 

law firm and its client, a trust company which is a defendant in 

the underlying diversity action involving claims for breach of 

fiduciary duty, fraud, breach of contract and negligence, arising 

from the trust company's role in a stock repurchase transaction. 

They jointly seek a writ directing the district court to vacate 

and reverse its orders compelling the law firm to comply with a 
subpoena duces tecum requesting its file relating to all work it 

performed for the client regarding the repurchase transaction. 

 They also seek a writ directing the district court to 

vacate and reverse its order denying their request for a 

protective order to enforce the umbrella of confidentiality 

established by a confidentiality agreement stipulated to by the 

parties to the underlying dispute, but which was never embodied 

in an order of the district court. In that regard, the specific 

issue we must decide is whether general allegations of 

embarrassment and injury to professional reputations and client 

relationships satisfies the "good cause" requirement for the 

issuance of an umbrella protective order pursuant to our recent 

decision in Pansy v. Borough of Stroudsburg, 23 F.3d 772 (3d Cir. 

1994). The law firm and its client assert that they will be 

unable to rectify the harm to their reputations and client 

relationships if the law firm's privileged documents are publicly 

disseminated. 

 We find that although they have established that there 

are no alternative avenues of appeal for these discovery orders, 

the law firm and the client trust company have failed to 

establish their clear and indisputable right to the writ. They 

failed to establish "good cause" for the protection of all of the 

law firm's file documents pursuant to the confidentiality 

agreement. Nor have they demonstrated that the district court 

erred in determining that the scope of the client's waiver of the 

attorney-client privilege, by injecting the client's reliance on 
advice of counsel as an issue in the underlying action, extended 

to the entire transaction, including back-up documents. 

 Accordingly, we decline to issue the requested writs. 
I. 

 Glenmede Trust Company ("Glenmede") is a Pennsylvania 

trust company that serves as the trustee for several charitable 

trusts, including the Pew Charitable Trusts.1 Glenmede also 

serves as a trustee for a number of private trusts and acts as an 

investment advisor pursuant to a written contract for other 

clients. B. Ray Thompson, Jr., several members of his family2

and the trustees3 of five trusts established by B. Ray Thompson, 

Sr. for the benefit of his five grandchildren (collectively "the 

Thompson Family") were investment advisory clients of Glenmede. 

Prior to September 11, 1990, both the Pew Charitable Trusts and 

the Thompson family held substantial shares of Oryx Energy 

Company stock; the Pew family's Oryx holdings totalled in excess 

of 25 million shares and the Thompson family's Oryx holdings 

totalled approximately 2.9 million shares. In mid-1990, Glenmede 

broached, with Oryx management, the subject of a direct buy-back 

of Oryx shares held by the Pew Charitable Trusts. Oryx was 

willing to repurchase a maximum of 18 million shares at a premium 

price per share but requested that buy-back discussions be kept 

 

1. The Pew Charitable Trusts are comprised of the Pew 

Memorial Trust, the J. Howard Pew Freedom Trust, the Mabel Pew 

Myrin Trust, the Trust under Paragraph 9 of the Will of J. N. 

Pew, Jr., and the Trust under the Will of Ethel Pew. 

2. These include B. Ray Thompson's wife, Juanne J. 

Thompson, and his five children, Adella S. Thompson, Sarah 

Thompson Tarver, Rebekah L. Thompson, Catherine V. Thompson and 

B. Ray Thompson, III. 

3. The trustees are B. Ray Thompson, Jr., Juanne J. 

Thompson and Dale A. Keasling. 
confidential. Given the limitations on the buy-back, Glenmede 

consulted its counsel, Pepper, Hamilton & Scheetz, as to whether 

the Oryx transaction could be extended to include Glenmede's 

private trust and investment advisory clients.4 

 Pepper Hamilton issued an Opinion Letter dated 

September 6, 1990 advising Glenmede that the buy-back transaction 

could not be structured to include private clients of Glenmede as 

to do so may violate Internal Revenue Code prohibitions on 

private foundations.5 Pepper Hamilton further advised Glenmede 

that it could not notify its private clients of the buy-back 

negotiations between Oryx and Glenmede acting in its capacity as 

trustee of the Pew Charitable Trusts. On September 11, 1990, 

Oryx repurchased through Glenmede 18 million of its common shares 

held by the Pew Charitable Trusts and converted the remaining 7.3 

million common shares held by the Pew Charitable Trusts to 

convertible preferred shares. Allegedly, based on the Opinion 

Letter from Pepper Hamilton, Glenmede excluded its private 

clients with holdings of Oryx stock from the buy-back 

transaction. 

 

4. Pepper Hamilton had a long-standing relationship with 

Glenmede and the Pew family. It incorporated Glenmede in 1956, 

drafted the trust instruments for the Pew charitable trusts 

administered by Glenmede, and attended all meetings of Glenmede's 

Board of Directors. A partner of Pepper Hamilton always served 

as the secretary and a board member of Glenmede. 

5. The Opinion Letter contained Pepper Hamilton's legal 

"opinion concerning the inclusion of certain private trusts and 

estates in transactions which may be undertaken by the Glenmede 

Trust Company on behalf of the charitable trusts for which it is 

trustee." 
 In September of 1992, the Thompson family brought an 

action against Glenmede, its parent Glenmede Corporation, a 

number of Glenmede officers and directors and the Chairman and 

CEO of Oryx, who was dismissed from this action, asserting, inter 

alia, claims for breach of fiduciary duty, fraud, breach of 

contract, and negligence, all allegedly arising from Glenmede's 

role in the September 11, 1990 buy-back transaction, in which 

Oryx repurchased 18 million of its shares from Glenmede as 

trustee of the Pew Charitable Trusts. Glenmede raised as its 

Fourteenth affirmative defense to these charges that it "was 

advised by counsel that it was legally precluded by Internal 

Revenue Code prohibitions from including Oryx shares held by 

other accounts in the repurchase transaction." 

 Glenmede concedes that the impact of placing at issue 

its reliance on advice of counsel was a waiver of the attorneyclient privilege limited to the subject matter placed at issue. 

Glenmede admitted only to a waiver of the attorney-client 

privilege relating to the subject matter of the Opinion Letter, 

which it submits is broader than tax advice which is the primary 

subject of the Opinion Letter, but narrower than the totality of 

the advice rendered regarding the buy-back transaction.6 In 

accordance with its position, Glenmede produced the Pepper 

Hamilton Opinion Letter and a draft Opinion Letter in response to 

discovery requests served by the Thompson family. 

 

6. Glenmede admitted at oral argument that the waiver was 

broader than tax advice but narrower than the entire transaction. 

Glenmede, however, did not offer further specificity regarding 

the scope of its waiver of the attorney-client privilege. 
 In response to the Thompson family's concern regarding 

the production of financial records, the parties stipulated to a 

"Confidentiality Order" restricting the disclosure of documents 

to be produced and establishing measures to maintain 

confidentiality pending an appeal from final judgment. As 

evidenced by the terms of the confidentiality agreement, the 

parties contemplated the wholesale adoption of that agreement by 

the district court. Although it was filed with the district 

court for approval, it was never endorsed in an order of court. 

Nevertheless, the parties complied with its terms, including the 

filing of pleadings under seal. 

 On July 30, 1993, the Thompson family served a subpoena 

duces tecum on Pepper Hamilton, requesting its entire file 

concerning services performed for Glenmede in connection with the 

buy-back transaction. Pepper Hamilton and Glenmede objected to 

the production of Pepper Hamilton's file on the basis of the 

attorney-client privilege. On October 18, 1993, the Thompson 

family filed a motion to compel the production of the file, 

arguing that Glenmede waived the attorney-client privilege 

because it raised reliance on advice of counsel pertaining to the 

buy-back transaction as an affirmative defense to the Thompson 

family's claims. The Thompson family further contended that 

Glenmede's concern regarding the production of Pepper Hamilton's 

file was unwarranted given the protection afforded by the 

confidentiality agreement to which the parties stipulated. 

 By Memorandum and Order dated December 14, 1993, the 

district court granted the Thompson family's motion to compel, 
concluding that Glenmede waived its attorney-client privilege 

concerning all communications, whether written or oral, to or 

from counsel, regarding the buy-back transaction. The district 

court ordered that Pepper Hamilton produce its entire file for 

services performed on behalf of Glenmede pertaining to the buyback transaction, including all back-up documents to the Opinion 

Letter. Glenmede and Pepper Hamilton moved for reconsideration 

of that Memorandum and Order, challenging the district court's 

conclusion that their invocation of the defense of reliance on 

advice of counsel resulted in a waiver of the attorney-client 

privilege encompassing all services Pepper Hamilton performed in 

connection with the buy-back transaction.7 Glenmede asserted 

that its waiver was limited to tax advice embodied in the Opinion 

Letter. By Memorandum and Order dated April 8, 1994, the 

district court rejected Glenmede's motion for reconsideration on 

the basis that the Opinion Letter discussed a number of issues in 

addition to tax advice, including insider trading and the 

financial ramifications of the transaction. The district 

court also concluded that Pepper Hamilton's involvement in 

structuring and closing the transaction required the production 

of back-up documents to the Opinion Letter to permit the Thompson 

family to analyze the reasonableness of Glenmede's reliance on 

the advice of counsel. 

 

7. At no time did Pepper Hamilton and/or Glenmede seek an 

in camera inspection of the file documents they sought to 

preclude from discovery. 
 Glenmede and Pepper Hamilton did not seek a writ of 

mandamus for immediate relief from the district court's orders 

compelling the production of documents; they opted to defer 

appellate review of the district court's rulings until final 

judgment. Instead, Pepper Hamilton produced in excess of 13,000 

documents in compliance with the district court's orders. 

 On June 20, 1994, Glenmede and the other defendants 

filed a motion for summary judgment under seal, attaching several 

Pepper Hamilton file documents for which the attorney-client 

privilege had been asserted but deemed waived by the district 

court. On June 27, 1994, the Thompson family challenged the 

"confidential" designation of the Pepper Hamilton file documents 

and notified Glenmede of their intent to treat them as nonconfidential.8 On July 18, 1994, Glenmede and Pepper Hamilton 

moved for a Protective Order objecting to the Thompson family's 

wholesale challenge to the confidentiality of the documents. The 

 

8. The confidentiality agreement provided a mechanism for 

challenging the designation of documents as "confidential" -- 

provide notification to the producing party of challenge to 

confidentiality, the parties confer in an attempt to resolve the 

challenge and, if no agreement can be reached, seek court 

intervention. The Thompson family mounted this challenge despite 

their representations to the district court that Glenmede and 

Pepper Hamilton's concerns regarding public disclosure were 

unwarranted in light of the protection afforded by the stipulated 

confidentiality agreement. Given our expectation that parties 

operate in good faith during discovery, we note that this 

challenge closely followed our decision in Pansy v. Borough of 

Stroudsburg, 23 F.3d 772 (3d Cir. May 2, 1994), regarding the 

impropriety of the issuance of broad confidentiality orders, 

which signaled a shift from the previous practice of judicial 

endorsement of such stipulations. 
Thompson family cross-moved to unseal the summary judgment 

documents filed under seal by Glenmede and the other defendants. 

 On October 21, 1994, the district court heard arguments 

on the pending motions.9 It directed the parties to negotiate 

the issues raised in the motion for protective order and to 

present a motion for the confidential treatment of particular 

documents or categories of documents. Glenmede, Pepper Hamilton 

and the Thompson family, however, were unable to reach an 

agreement regarding the confidential status of the Pepper 

Hamilton file documents. By Memorandum and Order dated November 

22, 1994, the district court granted the Thompson family's motion 

to amend the complaint to assert claims against individual Pepper 

Hamilton attorneys, quoting from a number of the Pepper Hamilton 

file documents. By Memorandum and Order dated November 29, 1994, 

the district court denied Glenmede and the other defendants' 

motion for summary judgment. 

 On November 30, 1994, Glenmede and Pepper Hamilton 

filed an emergency motion to seal court records and for 

protective order, seeking to seal both the district court's 

November 22, 1994 Memorandum and Order and the October 21, 1994 

hearing transcript, pending consideration of their motion for 

protective order to keep the Pepper Hamilton documents 

 

9. The motions included Glenmede and the other defendants' 

motion for summary judgment, Glenmede's motion for protective 

order and the Thompson family's motion to add Pepper Hamilton 

attorneys as defendants on the basis of information culled from 

the Pepper Hamilton file documents, a motion to compel the 

production of documents and a motion to unseal the record. 
confidential and for use only in these proceedings. By 

Memorandum and Order dated December 2, 1994, the district court 

denied Glenmede and Pepper Hamilton's initial motion for 

protective order and granted the Thompson family's motion to 

unseal the record.10 The district court determined that the 

confidentiality agreement did not satisfy Pansy's "good cause" 

requirement nor did Glenmede and Pepper Hamilton establish that 

disclosure of the Pepper Hamilton documents would cause them a 

defined and serious harm. 

 On December 13, 1994, Glenmede and Pepper Hamilton 

filed this petition for a writ of mandamus directing the district 

court to vacate and reverse its December 14, 1993 and April 8, 

1994 Memoranda and Orders compelling the production of the Pepper 

Hamilton file documents and its December 2, 1994 order denying 

confidentiality protection for those file documents. In 

addition, they seek a writ directing the district court: to 

place under seal its November 22 and 29, 1994 Memoranda and 

Orders, the October 21, 1994 hearing transcript and all briefs 

and pleadings that reference the Pepper Hamilton file documents; 

to remove all references to those Memoranda and Orders from all 

public access computer databases and district court records; and 

to order that the Memoranda and Orders not be published in any 

reporter. Glenmede and Pepper Hamilton contend that the district 

 

10. The district court did not dispose of Glenmede and 

Pepper Hamilton's emergency motion to seal court records and for 

protective order until January 12, 1995 when it issued a 

Memorandum and Order denying the unopposed motion. 
court's denial of the protective order has revealed the Pepper 

Hamilton file documents to the public, which cannot be remedied 

on appeal from final judgment. The public dissemination of the 

Pepper Hamilton documents is the harm sought to be averted via 

this mandamus petition. 

II. 

 This is an appeal from discovery orders which are not 

appealable as final decisions within the meaning of 28 U.S.C. § 

1291. See Haines v. Liggett Group Inc., 975 F.2d 81 (3d Cir. 

1992). Our jurisdiction is premised upon the All Writs Act, 

which provides that the federal courts "may issue all writs 

necessary or appropriate in aid of their respective jurisdictions 

and agreeable to the usages and principles of law." 28 U.S.C.A. 

§ 1651(a) (West 1994). The issuance of the writ must aid some 

present or potential exercise of appellate jurisdiction. See

Westinghouse v. Republic of the Philippines, 951 F.2d 1414, 1422 

(3d Cir. 1991). Since this diversity action is potentially 

within our appellate jurisdiction, we have jurisdiction to 

consider the petition for a writ of mandamus. 

 Nonetheless, our writ power should be invoked only in 

extraordinary situations, see Kerr v. United States Dist. Court 

for Northern Dist. of California, 426 U.S. 394, 402 (1976), i.e., 

only in limited circumstances where a party seeking issuance has 

no other adequate means to attain the desired relief and 

establishes that the right to the writ is clear and indisputable. 
Haines, 975 F.2d at 89. Once these prerequisites are met, the 

issuance of the writ is a matter of discretion. Id. 

 Although mandamus is an appropriate means of immediate 

appellate review of orders compelling the production of documents 

claimed to be protected by privilege or other confidentiality 

interest, Glenmede and Pepper Hamilton chose not to seek a writ 

of mandamus to prevent the production of the privileged Pepper 

Hamilton documents, instead relying on the protection afforded by 

the stipulated confidentiality agreement. See Bogosian v. Gulf 

Oil Corp., 738 F.2d 587, 591 (3d Cir. 1985). We must ascertain 

whether mandamus is an appropriate means of immediate appellate 

review of an order compelling the production of privileged 

documents after those documents have been produced to the 

discovering party. 

 Glenmede and Pepper Hamilton properly exercised their 

right to oppose the production of the privileged documents; 

however, when faced with the choice of seeking immediate relief 

through mandamus or producing the documents pursuant to the 

stipulated confidentiality agreement, Glenmede and Pepper 

Hamilton opted to produce the privileged documents. They relied 

on the fact that the Thompson family had adhered to the terms of 

the confidentiality agreement through the time of production and 

the Thompson's representation to the district court that Glenmede 

and Pepper Hamilton's concerns regarding public disclosure were 

unwarranted in light of the protection afforded by that 
agreement.11 The district court's subsequent denial of Glenmede 

and Pepper Hamilton's request for a protective order to enforce 

the umbrella of the confidentiality agreement stripped Glenmede 

and Pepper Hamilton of all means of appellate review, except this 

post-production mandamus petition, to remedy potential damage 

from the public disclosure of the Pepper Hamilton documents.12 

Hence, there are no other avenues of appellate review available 

to Glenmede and Pepper Hamilton to attempt to protect the 

privileged documents, which they produced in reliance on the 

confidentiality agreement, from widespread dissemination. It is 

in recognition of these unique circumstances that we proceed to 

review whether there is a clear and indisputable right to the 

writ regarding both the protective order and the order compelling 

the production of the Pepper Hamilton files. See Cipollone, 785 

F.2d at 1118. 

 

11. We appreciate that our decision in Pansy, decided 

shortly after the production occurred, surprised many by our 

questioning the judicial endorsement of broad confidentiality 

agreements: 

 Disturbingly, some courts routinely sign 

orders which contain confidentiality clauses 

without considering the propriety of such 

orders, or the countervailing public 

interests which are sacrificed by the orders. 

23 F.3d at 785. 

12. The protective order sought by Glenmede and Pepper 

Hamilton and denied by the district court was to protect the 

umbrella of confidentiality established by the confidentiality 

agreement. The district court has not ruled on the 

confidentiality of individual documents or categories of 

documents. Thus, Glenmede and Pepper Hamilton may still seek a 

protective order to maintain the confidentiality of specific 

categories of documents or individual documents. 
 III. 

 The district court's denial of Glenmede and Pepper 

Hamilton's request for a protective order was an exercise of the 

district court's discretion. Mandamus is not available for abuse 

of discretion but we may exercise mandamus jurisdiction regarding 

the denial of a protective order if we find that the district 

court committed a clear error of law. Cipollone, 785 F.2d at 

1118. The district court applied Pansy v. Borough of 

Stroudsburg, 23 F.3d 772 (3d Cir. 1994), and concluded that 

public policy considerations strongly militated against judicial 

sanctioning of the broad pre-Pansy confidentiality agreement 

proffered by the parties. The district court did not commit a 

clear error of law requiring our issuing a writ of mandamus. 

 A party seeking a protective order over discovery 

materials must demonstrate that "good cause" exists for the 

protection of that material. Fed. R. Civ. P. 26(c); Pansy, 23 

F.3d at 786. "Good cause" is established when it is specifically 

demonstrated that disclosure will cause a clearly defined and 

serious injury. Id. Broad allegations of harm, unsubstantiated 

by specific examples, however, will not suffice. Id. Glenmede 

and Pepper Hamilton bore the burden of establishing "good cause" 

to protect the umbrella of confidentiality established by the 

confidentiality agreement. 

 In Pansy, we recognized several factors, which are 

neither mandatory nor exhaustive, that may be considered in 

evaluating whether "good cause" exists: 
 1) whether disclosure will violate any privacy 

interests; 

 

 2) whether the information is being sought for a 

legitimate purpose or for an improper purpose; 

 3) whether disclosure of the information will cause a 

party embarrassment; 

 4) whether confidentiality is being sought over 

information important to public health and safety; 

 5) whether the sharing of information among litigants 

will promote fairness and efficiency; 

 6) whether a party benefitting from the order of 

confidentiality is a public entity or official; 

and 

 7) whether the case involves issues important to the 

public; 

23 F.3d at 787-91. Although we have recognized that the district 

court is best situated to determine what factors are relevant to 

the dispute, we have cautioned that the analysis should always 

reflect a balancing of private versus public interests -- 

 Discretion should be left with the court to 

evaluate the competing considerations in 

light of the facts of individual cases. By 

focusing on the particular circumstances in 

the cases before them, courts are in the best 

position to prevent both the overly broad use 

of [confidentiality] orders and the 

unnecessary denial of confidentiality for 

information that deserves it . . . . 

Id. at 789 (quoting Arthur R. Miller, Confidentiality, Protective 

Orders, and Public Access to the Courts, 105 Harv. L. Rev. 427, 

492 (1991)). 

 We recognize the distinguishable factual context of 

Pansy, from the facts of this appeal. In Pansy, a newspaper 
sought access to a settlement agreement entered into between the 

Borough of Stroudsburg and its former police chief who had sued 

the Borough after being demoted and suspended for allegedly 

mishandling parking meter money. 23 F.3d at 776. The public 

interest in Pansy was "particularly legitimate" given that one of 

the parties to the action was a public entity. Id. at 786. The 

public interest in access to information under freedom of 

information laws was the overriding factor that tipped the 

balance in favor of not granting a confidentiality order which 

would prevent disclosure pursuant to freedom of information laws. 

Id. at 791-92. Here, Glenmede and Pepper Hamilton assert that 

there is no legitimate public interest to be served by widespread 

dissemination of the Pepper Hamilton documents. See Pansy, 23 

F.3d at 788 ("[I]f a case involves private litigants, and 

concerns matters of little legitimate public interest, that 

should be a factor weighing in favor of granting or maintaining 

an order of confidentiality."). They contend they will be harmed 

by the Thompson family's disclosure of the privileged documents 

to other Glenmede clients who were excluded from the transaction 

and to the media. They are unable, however, to articulate any 

specific, cognizable injury from that dissemination. 

 Under Pansy, "[b]road allegations of harm, 

unsubstantiated by specific examples or articulated reasoning" do 

not support a good cause showing. Id. at 786. Glenmede and 

Pepper Hamilton do not describe their harm other than in 

generalized allegations of injury to reputation and to 

relationships with clients. For instance, Glenmede and Pepper 
Hamilton assert that the Thompsons' primary goal in reversing 

their position on confidentiality "is to publicize their 

allegations of a scheme between Glenmede and [Pepper Hamilton] in 

order to maximize the embarrassment and potential economic damage 

which such averments could generate to those institutions' 

relationships with their clients and the public." Petition at 

30. General allegations of injury to reputation and client 

relationships or embarrassment that may result from dissemination 

of privileged documents is insufficient to justify judicial 

endorsement of an umbrella confidentiality agreement.13 We have 

 

13. Moreover, the record of this case compels us to deny 

the requested writ despite our recognition of the importance of 

protecting the attorney-client privilege. See Haines v. Liggett 

Group Inc., 975 F.2d 81, 90 (3d Cir. 1992). We reiterate that 

the district court was never asked to perform an in camera 

inspection of any of the documents in conjunction with the 

request for protective order. In fact, when the district court 

requested that the parties segregate the documents into separate 

categories for consideration of confidentiality, the parties were 

unable to agree. Nor did Glenmede and Pepper Hamilton seek a 

protective order for specific documents that may prove harmful to 

their client relationships and/or reputations. As the district 

court noted: 

 [Glenmede and Pepper Hamilton] do not seek a 

Confidentiality Order. Rather they seek to 

protect the confidentiality agreement 

stipulated to by the parties. An "umbrella" 

of confidentiality already exists, but now 

the defendants must show good cause for 

protecting that confidentiality agreement. 

December 2, 1994 Memorandum and Order at 5. 

 At oral argument, we questioned whether Glenmede and 

Pepper Hamilton may seek relief through an independent breach of 

contract action stemming from the Thompson family's public 

dissemination of the file documents. (The only disclosure to 

date by the Thompson family of which we are aware was to aid the 

filing of a separate action by a similarly-situated plaintiff.) 
typically viewed the "embarrassment" factor in terms of nonpecuniary harm to individuals; however, the primary measure of 

the well-being of a business is pecuniary. See Cipollone, 785 

F.2d at 1121. Glenmede and Pepper Hamilton have failed to 

sustain their burden of demonstrating they will sustain a 

specific injury from the public dissemination of the privileged 

documents sufficient to warrant the entry of an umbrella 

protective order. 

 In Pansy, we emphasized the strong public interest in 

open proceedings. See 23 F.3d 772. See also Miller v. Indiana 

Hosp., 16 F.3d 549, 551 (3d Cir. 1994) ("While we have recognized 

that there are certain delineated areas where openness is not the 

norm . . . [citations omitted], these cases are the exception."). 

The allegations lodged against Glenmede stemming from its 

involvement in the buy-back transaction impact the claims or 

potential claims of other Glenmede clients who were excluded from 

the transaction. Federal courts should not provide a shield to 

potential claims by entering broad protective orders that prevent 

public disclosure of relevant information. The sharing of 

information among current and potential litigants is furthered by 

open proceedings. See Pansy, 23 F.3d at 787 ("Circumstances 

(..continued) 

Pepper Hamilton, however, conceded at oral argument that the 

Thompson family's challenge to the confidential designation 

affixed to the file documents comported with the literal terms of 

the agreement, if not with the spirit of the agreement. The 

agreement contemplated challenges to the confidential designation 

of documents; however, neither Pepper Hamilton nor Glenmede 

anticipated a wholesale challenge to confidentiality of the 

Pepper Hamilton file. 
weighing against confidentiality exist when confidentiality is 

being sought over information important to public health and 

safety [citation omitted], and when the sharing of information 

among litigants would promote fairness and efficiency [citation 

omitted]."). Absent a showing that a defined and serious injury 

will result from open proceedings, a protective order should not 

issue.14 

 Despite Glenmede and Pepper Hamilton's arguments to the 

contrary, the district court was not required to enter a 

protective order merely to preserve for appellate review its 

determinations that an exception to the attorney-client privilege 

applied. We have previously recognized the importance of 

preserving the right to appeal a determination that an exception 

to the attorney-client privilege applies prior to public 

disclosure of the privileged information. In Haines we stated: 

 Because of the sensitivity surrounding the 

attorney-client privilege, care must be taken 

that, following any determination that an 

exception applies, the matters covered by the 

exception be kept under seal or appropriate 

court-imposed privacy procedures until all 

avenues of appeal are exhausted. 

975 F.2d at 97. We did not intend, however, to establish a 

steadfast rule that protective orders must always issue to 

protect the privileged character of the materials sought in 

discovery until all avenues of appeal, including appeal from a 

 

14. Because it is unnecessary to our decision, we do not 

comment as to whether Glenmede and Pepper Hamilton would succeed 

in obtaining a protective order regarding specific documents 

contained in the Pepper Hamilton file. 
final judgment, are exhausted. Requiring the issuance of a 

protective order in all circumstances where a district court has 

determined that an exception to the attorney-client privilege 

applies thwarts our policy of open proceedings absent a showing 

of good cause to close them. See Pansy, 23 F.3d 772; Miller, 16 

F.3d 549. Such a rule would be tantamount to permitting the 

parties to control the use of protective orders.15 This is 

especially evident where, as here, the party asserting the 

privilege chooses to forego, until final judgment, appellate 

review of the district court's determination that an exception to 

the attorney-client privilege applies. 

 The unique evolution of events in this case, however, 

bids us to review the district court's determination as to the 

scope of Glenmede's waiver of the attorney-client privilege. We 

recognize that the district court's denial of the protective 

order subsequent to the production of the Pepper Hamilton file 

 

15. On March 14, 1995, the Judicial Conference of the 

United States rejected a proposed amendment to Federal Rule of 

Civil Procedure 26(c) that provides in part that: "the court . . 

. may, for good cause shown or on stipulation of the parties, 

make any order that justice requires to protect a party or person 

from annoyance, embarrassment, oppression, or undue burden or 

expense. . . ." (Emphasis in original). In addition, the 

proposed rule would add a new section 26(c)(3) that provides a 

means for modification or dissolution of a protective order on 

motion of a party, a person bound by it or a person who has been 

permitted to intervene to seek modification or dissolution. The 

Judicial Conference recommitted the proposed amendments to Rule 

26(c) to the Rules Committee for further study. Judicial 

Conference of the United States, Preliminary Report Judicial 

Conference Actions, March 14, 1995; Committee on Rules of 

Practice and Procedure of the Judicial Conference of the United 

States, Report of Advisory Committee on Civil Rules, December 13, 

1994. 
jeopardized Glenmede and Pepper Hamilton's ability to remedy on 

appeal from final judgment the harm, if any, they may suffer as a 

result of the public dissemination of the privileged materials. 

This turn of events places Glenmede and Pepper Hamilton in the 

unfortunate and unforeseeable position of seeking post-production 

mandamus relief from the disclosure of privileged information. 

IV. 

 The attorney-client privilege16 may be waived by a 

client who asserts reliance on the advice of counsel as an 

affirmative defense. See Rhone-Poulenc Rorer, 32 F.3d at 863. 

Under such circumstances, the client has made a conscious 

decision to inject the advice of counsel as an issue in the 

litigation. Id. Although we recognized these propositions in 

 

16. Communications that may be protected from disclosure 

during discovery because of the attorney-client privilege possess 

the following characteristics: 

 (1) the asserted holder of the privilege 

is or sought to become a client; (2) the 

person to whom the communication was made (a) 

is a member of the bar of a court, or his or 

her subordinate, and (b) in connection with 

this communication is acting as a lawyer; (3) 

the communication relates to a fact of which 

the attorney was informed (a) by his client 

(b) without the presence of strangers (c) for 

the purpose of securing primarily either (i) 

an opinion of law or (ii) legal services or 

(iii) assistance in some legal proceeding, 

and (d) not for the purpose of committing a 

crime or tort; and (4) the privilege has been 

(a) claimed and (b) not waived by the client. 

Rhone-Poulenc Rorer Inc. v. Home Indemnity Co., 32 F.3d 851, 862 

(3d Cir. 1994). 
Rhone-Poulenc, our holding in that case -- that a party does not 

lose the privilege to protect attorney-client communications from 

disclosure in discovery when his or her state of mind is placed 

at issue -- was premised upon the unique facts of that case. 32 

F.3d 864. In Rhone-Poulenc, advice of counsel was not raised as 

an affirmative defense nor were there any acts evincing a clear 

intent to waive the attorney-client privilege by placing at issue 

reliance on the advice of counsel. Here, Glenmede raised 

reliance on the advice of counsel regarding what parties should 

be included in the buy-back transaction as an affirmative defense 

to the Thompson family's claims and voluntarily produced the 

Opinion Letter and a draft of it in response to discovery 

requests. 

 Glenmede and Pepper Hamilton concede that Glenmede 

waived the attorney-client privilege regarding the Opinion Letter 

and any communications between itself and Pepper Hamilton 

pertaining to that letter. They object, however, to the district 

court's conclusion that Glenmede's waiver of the attorney-client 

privilege encompassed the entire buy-back transaction, including 

internal Pepper Hamilton back-up documents to the Opinion Letter 

that were never communicated to Glenmede. They submit that it 

was clear error for the district court to expand the waiver 

beyond the confines of the issue addressed in the Opinion Letter 

to all communications, whether written or oral, to or from 

counsel concerning the buy-back transaction.17 

 

17. We note that Glenmede and Pepper Hamilton base their 

argument for our finding a limited waiver of the attorney-client 
 There is an inherent risk in permitting the party 

asserting a defense of its reliance on advice of counsel to 

define the parameters of the waiver of the attorney-client 

privilege as to that advice. That party should not be permitted 

to define selectively the subject matter of the advice of counsel 

on which it relied in order to limit the scope of the waiver of 

the attorney-client privilege and therefore the scope of 

discovery. To do so would undermine the very purpose behind the 

exception to the attorney-client privilege at issue here -- 

fairness. 

 The party opposing the defense of reliance on advice of 

counsel must be able to test what information had been conveyed 

by the client to counsel and vice-versa regarding that advice -- 

whether counsel was provided with all material facts in rendering 

their advice, whether counsel gave a well-informed opinion and 

whether that advice was heeded by the client. See In re ML-Lee 

Acquisition Fund II, L.P., 859 F. Supp. 765, 767 (1994). Here, 

the advice that Glenmede placed at issue related to the structure 

of the transaction -- the identity of the parties and how many of 

their shares would be repurchased by Oryx. In fact, the Opinion 

Letter indicates that Glenmede requested advice "concerning the 

inclusion of certain private trusts and estates in transactions." 

(..continued) 

privilege exclusively on the confines of the attorney-client 

privilege; they do not rely on the separate attorney work product 

doctrine to prevent the disclosure of Pepper Hamilton's internal 

file documents. See, e.g., Sporck v. Peil, 759 F.2d 312 (3d 

Cir.), cert. denied, 474 U.S. 903 (1985); Bogosian v. Gulf Oil 

Corp., 738 F.2d 587 (3d Cir. 1984). 
Testing the advice of counsel defense regarding why only the Pew 

Charitable Trusts were included in the transaction necessarily 

encompasses, as Glenmede acknowledges, more than tax advice. We 

agree with the district court that Glenmede waived the attorneyclient privilege as to all communications, both written and oral, 

to or from counsel as to the entire transaction. 

 We also agree that Glenmede's waiver encompasses the 

back-up documents to the Opinion Letter, which include Pepper 

Hamilton's internal research and other file memoranda.18 A 

review of these internal documents may lead to the discovery of 

admissible evidence regarding what information had been conveyed 

to Glenmede about the structure of the buy-back transaction and 

the advice of counsel in that regard. Because it is unnecessary 

to our holding, we do not determine whether such documents are 

relevant for any purpose other than the fact that they may lead 

to the discovery of admissible evidence.19 

V. 

 

18. We again note that Pepper Hamilton has not asserted 

that these internal file memoranda are protected by the work 

product doctrine, which would have required a different analysis 

by the district court. 

19. We again note that Pepper Hamilton and Glenmede may 

possess other means to protect the confidentiality of some of 

these internal documents. They have never sought a protective 

order respecting specific internal memoranda that, though 

relevant for discovery purposes, may reveal information, such as 

clients of Glenmede and Pepper Hamilton or financial information 

not relevant to the dispute, that is not of public import. 
 We also deny Glenmede and Pepper Hamilton's request for 

a writ sealing district court opinions and a hearing transcript 

and removing all opinions and pleadings referencing the Pepper 

Hamilton documents from public access. As we have previously 

recognized, the right of access to judicial records is beyond 

dispute. See Miller, 16 F.3d at 551; Leucadia, Inc. v. Applied 

Extrusion Technologies, Inc., 998 F.2d 157 (3d Cir. 1993). As we 

held above, we find that the district court did not err in its 

rulings as to the scope of Glenmede's waiver of the attorneyclient privilege and the denial of a protective order requesting 

an umbrella of confidentiality for the Pepper Hamilton documents. 

Thus, we must also deny Glenmede and Pepper Hamilton's request 

for mandamus relief from the dissemination of the Pepper Hamilton 

file documents through public access to judicial records. 

VI. 

 For the foregoing reasons, we will deny the requested 

writs of mandamus. 

 

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