Recently, I was approached by multiple parties to represent them in potential litigation in West Texas. Immediately bells and whistles went off about attorney-client communication issues. So before visiting with the potential clients and possibly other retained counsel for other parties, I decided to review the attorney-client privilege in connection with potential multi-party litigation.
The Texas version of the attorney-client privilege is codified at Texas Rule of Evidence 503. Under Rule 503, confidential communications between client and counsel made to facilitate legal services are generally insulated from disclosure. TRE 503(b). While it is the oldest privilege for confidential communications known under common law, it is not absolute. See In re XL Specialty Ins. Co., 373 S.W.3d 46 (Tex. 2011). What is really noteworthy about the XL Specialty case is the Supreme Court of Texas’ discussion and holding with respect to the requirements for the allied litigant doctrine and the discussion of the joint client privilege, joint defense and common interest doctrines in Texas.
XL Specialty was a case where a Cintras employee was seeking workers’ compensation benefits and was being litigated in a contested case administrative hearing with the Division of Workers’ Compensation. The claim was denied and the employee sued XL Specialty, the workers’ compensation insurer, and the third-party administrator, Cambridge. During the litigation, the employee asked for communications between the insurer, XL Specialty, and Cintras, the employer, associated with the administrative hearing. XL Specialty and Cambridge asserted the attorney-client privilege under TRE 503(b)(1)(C) (i.e. the allied litigant doctrine) and asked the trial court to sustain their objection based on the attorney-client privilege. The objection was based on the allied litigant doctrine that protects communications made between a client, or the client’s lawyer, to another party’s lawyer, not to the other party itself. See In re XL Specialty Ins. Co., 373 S.W.3d 46, 52 (Tex. 2011), citing, Robert Bosch, LLC v. Pylon Mfg. Corp., 263 FR.D. 142, 146 (D. Del. 2009).
Rule 503(b)(1)(C) protects information covered by the attorney-client privilege made “by the client, the client’s representative, the client’s lawyer, or the lawyer’s representative to a lawyer representing another party in a pending action or that lawyer’s representative, if the communications concern a matter of common interest in the pending action.” The trial court denied the objection and held that the attorney-client privilege did not apply. The court of appeals denied mandamus and XL Specialty and Cambridge asked for the Supreme Court to grant relief and to hold that the attorney-client privilege applied.
The Supreme Court denied the requested relief and held that the communications between XL’s lawyer and its insured, Cintas, were not privileged or protected under TRE 503(b)(1)(C)’s allied litigant privilege because the communications were not made to a lawyer or representative representing another party in a pending action as required by the rule. Here, the communication between XL Specialty’s lawyer and a third party/employer, Cintas, who was not represented by XL Specialty’s lawyer, and was not a party to the litigation or other related pending action, was insufficient to and failed to meet the requirement that the communication be made to a lawyer or her representative representing another party in the pending action. See In re XL Specialty Ins. Co., 373 S.W.3d 46, 53-54 (Tex. 2011).
In Texas, which has a pending action requirement, no common interest privilege extends beyond litigation. The pending action requirement limits the privilege to situations where the benefit and the necessity are at the highest. Under the allied litigant doctrine, communications made between a client, or the client’s lawyer to another party’s lawyer (but not the party itself) are protected. See In re XL Specialty Ins. Co., 373 S.W.3d 46, 52 (Tex. 2011). For the allied litigant doctrine to apply, the following elements should be present: 1). Separately represented parties; 2). a pending action; and 3). a communication involving a common legal interest made by or to a lawyer of one of the parties as communication of privileged information between the parties themselves will waive the privilege.
I recommend anyone who wants to get a snapshot of Texas’ attorney-client privilege doctrine to review TRE 503 and the XL Specialty case. The pending action requirement is much narrower than the “in anticipation of litigation” standard still used in many jurisdictions. The attorney-client privilege in Texas is a creature of statute and inadvertent waiver can occur unless all the statutory elements are met. The opinions expressed in this blog are the solely the author’s. Any comments, suggestions, or replies can be sent to john@jrjoneslaw.com.
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