Navigating Dual Purpose Communications After SCOTUS (Almost) Weighs In On Attorney-Client Privilege: 5 Practical Tips For Healthcare Attorneys

• Jurisdiction: United States,Federal
• Law Firm: Sheppard Mullin Richter & Hampton
• Subject Matter: Litigation, Mediation & Arbitration, Food, Drugs, Healthcare, Life Sciences, Disclosure & Electronic Discovery & Privilege, Trials & Appeals & Compensation
• Author: Ms Elizabeth Balfour, Kathleen M. O'Neill, Jenna A. Fasone and Siena Sylvester
• Published date: 16 February 2023

Inside and outside healthcare counsel should know that the way they guide clients through legal and business issues may need to change based on a recent Ninth Circuit case governing the protections afforded to attorney-client communications, In re Grand Jury.¹ The following update and insights will help you mitigate against the risk of attorney-client emails being produced in litigation:

• Legal and Non-Legal ("Dual-Purpose") Communications are Common Across Healthcare
• There is a Circuit-Split on What Test Applies to Dual-Purpose Communications
• The Supreme Court Balks and the Ninth Circuit Reinforces the Primary Purpose Test
• Five Practical Tips
• Closing Thoughts

(A) Dual-Purpose Communications with Legal and Non-Legal Elements are Common Across Healthcare

Communications between attorneys and clients must be for the purpose of giving or receiving legal advice for the attorney-client privilege to apply. A dual-purpose communication is one that has both a legal and a business purpose. For many healthcare attorneys, these types of dual-purpose communications are more common than communications involving only purely "legal" advice. For example, consider physician compensation. This topic always involves a legal angle, such as Stark Law or Anti-Kickback compliance, or state fraud and abuse law considerations. However, it almost always involves a business angle too. For example, what specific deal terms are the parties negotiating? Are bonuses involved? Will payments involve estimation and reconciliation? On what schedule? And so on. Healthcare attorneys in particular should consider if they need to adjust their approach on dual communications given recent caselaw in the Ninth Circuit (and SCOTUS' subsequent decision not to clarify which standard applies).

(B) There is a Circuit-Split on What Test Applies to Dual-Purpose Communications

Before explaining what to consider in drafting dual purpose communications, we want to clarify that the test that applies to them varies by circuit. Specifically, there are three key tests:

• "Primary Purpose" Test: Whether the primary purpose of the communication is to give or receive legal advice, as opposed to business or tax advice. This is the narrowest test, adopted in some form by the Second, Fifth Sixth, and Ninth Circuits.²
• "Because Of" Test: Whether it can fairly be said that the document was created because of anticipated litigation and would not have been created in substantially similar form but for the prospect of...