Opinion ID: 654186
Heading Depth: 3
Heading Rank: 2

Heading: Privilege Under Federal Law

Text: 14 Linde Thomson urges this court to apply the Missouri law of privilege because it can do so at no substantial cost to federal substantive and procedural policy. United States v. King, 73 F.R.D. 103, 105 (E.D.N.Y.1976); see also Memorial Hosp. v. Shadur, 664 F.2d 1058, 1061 (7th Cir.1981); Riley v. City of Chester, 612 F.2d 708, 715 (3d Cir.1979). In substance, Linde Thomson suggests that we give the law of a particular [303 U.S.App.D.C. 322] state persuasive effect as a matter of federal law. See D'Oench, Duhme & Co., v. FDIC, 315 U.S. 447, 471, 62 S.Ct. 676, 685, 86 L.Ed. 956 (1942) (Jackson, J., concurring). We decline the opportunity to adopt a particular state's privilege law where, as here, the documents in question are sought by a governmental agency with a nationwide mandate to redress matters of pressing public concern. We have previously recognized a strong public interest in having administrative investigations proceed expeditiously and without impediment. FTC v. TRW, Inc., 628 F.2d 207, 210 (D.C.Cir.1980). The serious risk that inconsistent state privilege rules might unduly constrict the RTC's discretion in contravention of its congressional mandate makes it abundantly clear that this is a situation in which state privileges may not be adopted costlessly. A uniform rule, rather than ad hoc borrowing, will better promote federal policy objectives. 15 Federal courts have never recognized an insured-insurer privilege as such. See Petersen v. Douglas County Bank & Trust Co., 967 F.2d 1186, 1188 (8th Cir.1992); Gottlieb v. Bresler, 24 F.R.D. 371, 372 (D.D.C.1959); John P. Ludington, Annotation, Insured-Insurer Communications as Privileged, 55 A.L.R.4th 336 (1992). Moreover, as the Supreme Court has recently made clear, federal courts should not create evidentiary privileges lightly, [i]nasmuch as '[t]estimonial exclusionary rules and privileges contravene the fundamental principle that the public ... has a right to every man's evidence.'  University of Pennsylvania v. EEOC, 493 U.S. 182, 189, 110 S.Ct. 577, 582, 107 L.Ed.2d 571 (1990) (quoting Trammel v. United States, 445 U.S. 40, 50, 100 S.Ct. 906, 912, 63 L.Ed.2d 186 (1980) (citation omitted)). In evaluating a claimed peer-review privilege against compliance with an EEOC subpoena, the Supreme Court suggested that considerable reluctance should greet any attempt--as is made here--to fashion a privilege lacking in historical or statutory basis. See University of Pennsylvania, 493 U.S. at 195, 110 S.Ct. at 585. The imperative of caution appears even stronger in the administrative subpoena context, in which strong public interests in efficient investigation contend with the public policy rationale underlying evidentiary privileges. See, e.g., FTC v. TRW, Inc., 628 F.2d 207, 210 (D.C.Cir.1980). 16 Perhaps recognizing the difficulties inherent in proposing a broad new privilege, Linde Thomson attempts to moor the protection for insured-insurer communications within the existing attorney-client privilege framework. Linde Thomson insists that the liability insurer acts as a mere intermediate agent in transmitting a communication pertaining to liability from the insured to attorneys. See State ex rel. Cain v. Barker, 540 S.W.2d 50, 54 (Mo.1976). Because we believe that this contention merits exploration, we turn to the scope of the federal attorney-client privilege. 17 This court adheres to the axiom that the attorney-client privilege must be strictly confined within the narrowest possible limits consistent with the logic of its principle. In re Sealed Case, 676 F.2d 793, 807 n. 44 (D.C.Cir.1982) (citing In re Grand Jury Investigation, 599 F.2d 1224, 1235 (3d Cir.1979)). Because we have never been confronted with a claimed insured-insurer facet to the attorney-client privilege, we must extrapolate from precedent to determine whether protection for insured-insurer communications is coextensive with the logic of the attorney-client privilege principle. The attorney-client privilege undeniably extends to communications with one employed to assist the lawyer in the rendition of professional legal services. Supreme Court Standards 503(a)(3), 503(b), cited in United States v. (Under Seal), 748 F.2d 871, 874 n. 5 (4th Cir.1984). In FTC v. TRW, Inc., 628 F.2d 207, 212 (D.C.Cir.1980), we explored the ambit of this logic. Tracing the line of cases beginning with Judge Friendly's opinion in United States v. Kovel, 296 F.2d 918 (2d Cir.1961), we observed that the privilege logically encompassed reports of third parties made at the request of the attorney or client where the purpose of the report was to put in usable form information obtained from the client. TRW, 628 F.2d at 212. We stressed that the critical factor for purposes of the attorney-client privilege was that the communication be made in confidence for the purpose of obtaining legal advice from the lawyer. Id. (citing Kovel, 296 F.2d at 922)[303 U.S.App.D.C. 323] (emphasis in original). We cited cases consistent with this limitation extending the attorney-client privilege to a psychiatrist hired by a defense lawyer to aid in an insanity defense, United States v. Alvarez, 519 F.2d 1036, 1045-1046 (3d Cir.1975), to an accountant hired by an attorney to assist the attorney in giving the client tax advice, United States v. Cote, 456 F.2d 142, 144 (8th Cir.1972), and to an accountant who prepared a statement of a client's net worth at the attorney's request, United States v. Judson, 322 F.2d 460, 462-63 (9th Cir.1963). We cautioned restraint, however, lest the privilege be construed to engulf all manner of services that should not be summarily excluded from the adversary process. TRW, 628 F.2d at 212. 18 Armed with caution and an understanding that the privilege protects only those communications made for the purpose of obtaining legal advice from the lawyer, TRW, 628 F.2d at 212 (citing Kovel, 296 F.2d at 922) (emphasis omitted), we now firmly reject any sweeping general notion that there is an attorney-client privilege in insured-insurer communications. 6 An insured may communicate with its insurer for a variety of reasons, many of which have little to do with the pursuit of legal representation or the procurement of legal advice. Certainly, where the insured communicates with the insurer for the express purpose of seeking legal advice with respect to a concrete claim, or for the purpose of aiding an insurer-provided attorney in preparing a specific legal case, the law would exalt form over substance if it were to deny application of the attorney-client privilege. However, a statement betraying neither interest in, nor pursuit of, legal counsel bears only the most attenuated nexus to the attorney-client relationship and thus does not come within the ambit of the privilege. To paraphrase the Kovel case, if what is sought is not legal advice, but insurance, no privilege can or should exist. See Kovel, 296 F.2d at 922. 19