Samaritan Foundation v. Goodfarb
| Decision Date | 16 November 1993 |
| Docket Number | No. CV-92-0282-PR,CV-92-0282-PR |
| Citation | 176 Ariz. 497,862 P.2d 870 |
| Parties | , 62 USLW 2341, 26 A.L.R.5th 893 SAMARITAN FOUNDATION, an Arizona corporation; Samaritan Health Services, dba Good Samaritan Regional Medical Center, an Arizona corporation; Cathey Milam Chester and Elaine Fraiz, Petitioners, Lawrence J. Koep, M.D., P.C., an Arizona corporation and Lawrence J. Koep, M.D., Defendants-Petitioners, v. The Honorable Stanley Z. GOODFARB, a judge thereof, Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge, and Arista Mia DAWSON, a minor, By and Through her next friend and natural father, Robert E. DAWSON; Robert E. Dawson and Dale M. Dawson, husband and wife, Real Parties in Interest. PHOENIX CHILDREN'S HOSPITAL, INC., an Arizona corporation, Petitioner, v. The Honorable Stanley Z. GOODFARB, a judge thereof, Superior Court of the State of Arizona, in and for the County of Maricopa, Respondent Judge, and Arista Mia DAWSON, a minor, By and Through her next friend and natural father, Robert E. DAWSON; Robert E. Dawson and Dale M. Dawson, husband and wife, Real Parties in Interest. |
| Court | Arizona Supreme Court |
This case requires us to define the nature and scope of the corporate attorney-client privilege. We necessarily examine the nature of the communication and the communicator. In the process, we reject the control group test as being both overinclusive and underinclusive. Our conclusions focus more on the nature of the communication than on the status of the communicator. The relevant inquiry is: to which corporate employee communications does the privilege apply, not to which corporate employees does the privilege apply. We hold that all communications initiated by the employee and made in confidence to counsel, in which the communicating employee is directly seeking legal advice, are privileged. In contrast, where an investigation is initiated by the corporation, factual communications from corporate employees to corporate counsel are within the corporation's privilege only if they concern the employee's own conduct within the scope of his or her employment and are made to assist counsel in assessing or responding to the legal consequences of that conduct for the corporate client.
A child's heart stopped during surgery at the Phoenix Children's Hospital in the Good Samaritan Regional Medical Center in 1988. A Good Samaritan lawyer investigated the incident and directed a nurse paralegal to interview three nurses and a scrub technician who were present during the surgery. Each of these Samaritan employees signed a form agreeing to accept legal representation from Samaritan's legal department. The paralegal summarized the interviews in memoranda that she then submitted to corporate counsel.
The child and her parents brought an action against Phoenix Children's Hospital and the physicians who participated in the surgery, alleging that the cardiac arrest and resulting impairment were caused by the defendants' medical negligence. When deposed two years later, the four Samaritan employees were unable to remember what happened in the operating room. Having learned of the existence of the interview summaries through discovery, plaintiffs sought their production. Samaritan, a non-party, and Phoenix Children's Hospital resisted, arguing that the interview summaries were protected by the attorney-client privilege and the work product doctrine. The trial court ordered production of the summaries for in camera review. It said it would strike out attorney work product and then release to the plaintiffs those portions of the summaries that would otherwise constitute witness statements. In short, the trial judge treated the documents as though they were not within the corporate attorney-client privilege, but were within the work product doctrine.
Samaritan and Children's Hospital filed petitions for special action in the court of appeals arguing, among other things, that under the rule of Upjohn Co. v. United States, 449 U.S. 383, 101 S.Ct. 677, 66 L.Ed.2d 584 (1981), the employee communications summarized in the memoranda were within Samaritan's attorney-client privilege. The court of appeals accepted jurisdiction but denied relief. It rejected Upjohn, adopted the control group test, and created a qualified attorney-client privilege for non-control group employees. It held that only communications of control group employees were within the absolute protection of the corporation's attorney-client privilege. The court concluded that the plaintiffs had made a showing of the sort of need that is required to reach work product, and because the nurses and scrub technician were not control group employees, rejected Samaritan's claim of attorney-client privilege. Samaritan Foundation v. Superior Court, 173 Ariz. 426, 844 P.2d 593 (App.1992). We granted Samaritan's and Phoenix Children's Hospital's petitions for review and now affirm the trial court but vacate that part of the court of appeals' opinion that addresses the corporate attorney-client privilege.
We resolve preliminary issues first. To the extent that each of the petitions for review raises issues other than the corporate attorney-client privilege, we resolve them against the petitioners. This means that we agree with the resolution by the court of appeals of issues relating to the work product doctrine. And, because the documents have been produced by Samaritan, Phoenix Children's Hospital's claim of immunity based upon non-possession is moot. The surviving issues in each of the petitions for review relate to the rejection by the court of appeals of the Upjohn case, and its creation of a qualified attorney-client privilege for non-control group employees. It is to these fundamental issues that we now turn.
In Upjohn, the Court rejected the control group test under federal common law. The control group test focuses on the nature of the communicator rather than the communication. Under it, persons in a position to control or take a substantial part in a decision about action a corporation may take upon advice of counsel have the capacity to make communications to corporate counsel that are within the corporation's attorney-client privilege. See City of Philadelphia v. Westinghouse Elec. Corp., 210 F.Supp. 483, 485 (E.D.Pa.), petition for writ of mandamus or prohibition denied sub nom. General Elec. Co. v. Kirkpatrick, 312 F.2d 742 (3d Cir.1962), cert. denied, 372 U.S. 943, 83 S.Ct. 937, 9 L.Ed.2d 969 (1963). Other employees do not. Eschewing Upjohn, our court of appeals adopted the control group test, and then created a lesser, qualified privilege for non-control group employees. We think an approach that focuses solely upon the status of the communicator fails to adequately meet the objectives sought to be served by the attorney-client privilege. We take a functional approach. The focus is on the nature of the communication and not the communicator. This does not, however, mean that Samaritan prevails, for as we shall see, under our functional approach, the privilege does not apply to corporate-initiated factual communications from those who, but for their status as employees, are mere witnesses.
Because our approach focuses on the substance of the attorney-client privilege, we state some first principles. Under the attorney-client privilege, unless a client consents, a lawyer may not be required to disclose communications made by the client to the lawyer or advice given to the client in the course of professional employment. A.R.S. § 12-2234 (1982) (civil actions). See also A.R.S. § 13-4062(2) (1989) (criminal proceedings). The privilege is intended to encourage the client in need of legal advice to tell the lawyer the truth. Unless the lawyer knows the truth, he or she cannot be of much assistance to the client. Thus, the privilege is central to the delivery of legal services in this country. See State v. Holsinger, 124 Ariz. 18, 22, 601 P.2d 1054, 1058 (1979) (...
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