Sampson case deals with attorney-client privilege

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In what might be one of the most important discovery disputes in the state since State ex rel. Dudek v. Circuit Court, the Wisconsin Supreme Court may soon determine whether a lawyer responding to a discovery request can independently waive the attorney-client privilege by producing privileged documents to opposing counsel.

During oral argument in Harold Sampson Children’s Trust, et al. v. Linda Gale Sampson 1979 Trust, et al. last week, Jane C. Schlicht of Cook & Franke S.C., representing the plaintiffs/petitioners, told the justices that the court of appeals sidestepped a long line of Wisconsin cases when it held that prior counsel for her clients had the ability to waive attorney-client privilege without his clients’ approval.

“We believe that the overriding issue presented to this court in the case is whether Wisconsin will deviate from the previously well-established rule that only the client can waive the attorney-client privilege, and whether or not Wisconsin will permit a waiver by counsel when a disclosure is made without the client’s knowledge or consent,” she said.

But the defendants’ counsel, Scott R. Halloin of Mallery & Zimmerman S.C., argued that a ruling against waiver in the case could encourage lawyers to take their clients’ documents and send them off in discovery when pressed for time, leaving errors to be addressed later.

Instead, Halloin said, the Supreme Court should send a message to lawyers to review documents carefully, raise issues with clients, and make sure their document productions are correct.

“I think it would be poor public policy by this court to impose a standard that relieves the attorney from that obligation,” he said.

Waiving Attorney-Client Privilege

The Sampson case, which the court of appeals characterized as an “inter-family dispute over money,” resulted in a published opinion issued by that court in June 2003.

The court of appeals held that the petitioners’ prior counsel’s “volitional act” of transmitting documents pursuant to a discovery request waived any attorney-client privilege that might have protected them against disclosure, reversing Milwaukee County Circuit Court Judge Dominic S. Amato’s non-final order directing the defendants to return to the plaintiffs documents that were held protected by the attorney-client privilege.

The appellate court’s decision, authored by Judge Ralph Adam Fine, has already been cited in another opinion issued by the court of appeals in February of this year in support of a holding of a waiver of privilege for statements made to a counselor by a patient, Schlicht noted.

The court of appeals’ opinion in Sampson cited a report prepared by a referee appointed by the trial court that described the petitioners’ prior counsel, Attorney Robert L. Elliott, as testifying “as found by the referee, ‘that it was his practice (which he believed he followed in this case) to read every page of every document and if a question (about it being privileged) came up, he would ask the clients about the document.’”

The court of appeals also noted that Elliott reviewed the challenged documents at a hearing before the referee and testified, according to the referee, that he saw no reason to conclude that the documents were privileged.

Schlicht told the Supreme Court that Beth Bauer, a plaintiff whose notes are at issue, testified that she did not know that the documents had been produced until after Schlicht’s firm had been retained.

The referee, Theodore J. Hodan, concluded that Elliott should have realized that the documents were privileged or that further information from the client was necessary prior to producing them, according to the court of appeals. The referee also decided that the attorney-client privilege had been waived as to the documents. But the trial court disagreed, holding that Elliott was not capable of waiving a privilege held by his clients under Wisconsin law.

Bright-Line Test

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At the oral argument, Schlicht urged the Supreme Court to adhere to a “bright-line test” under which information disclosed without a client’s knowledge or consent would not result in waiver. That rule would encourage confidence and trust in the attorney-client relationship and foster professionalism between counsel, she said. She added that if lawyers realize they will not be able to use privileged documents that are disclosed without clients’ permission, they will be more willing to “work with opposing counsel and say, ‘Did you really mean to turn this over?’”

In response to a question by Justice David Prosser, Jr., Schlicht said that although it is not possible to “erase” improperly disclosed information from people’s brains, they can be subject to restrictions like those imposed on employees who leave jobs after they learn trade secrets from their former employers.

“You can impose limitations and hope that their integrity and responsibility will then enhance the ability for that remedy to be effective,” she said.

But Halloin argued that it is not very feasible to undo a disclosure once it has occurred in a case.

“The fact of the matter is the unringing of that bell is very difficult to do,” he said.

Halloin also told the high court that his clients had invested resources in the case based on the assumption the documents at issue would be available to them, and they would be “losing something” if the court ruled that any privilege was not waived by the document production.

The question before the Supreme Court, Halloin said, can be framed in terms of who bears the risk of loss under those circumstances.

He added that the petitioners’ proposed rule risks disrupting litigation and creating “chaos” when clients tell their lawyers “on the eve of trial, ‘You produced that? I intended that to be privileged.’”

Justice Patience D. Roggensack questioned how far a waiver of privilege could extend once found to have occurred.

“What we do here will have an impact down the road,” she said.