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Oregon Supreme Court Recognizes That A Law Firm’s Communications To In-House Counsel Are Privileged

CRIMSON TRACE CORPORATION v. DAVIS WRIGHT TREMAINE LLP, 355 Or. 476 – Or: Supreme Court 2014 – Google Scholar.

This is an important issue in legal malpractice litigation – what happens to the communications between lawyers in a law firm and their in-house counsel. In this case the Oregon Supreme Court has recognized that those communications are privileged under the attorney-client privilege.

Oregon’s Evidence Code has a pertinent provision:

“OEC 503 defines relevant terms and sets out the attorney-client privilege as follows:

“(1) As used in this section, unless the context requires otherwise:

“(a) `Client’ means a person, public officer, corporation, association or other organization or entity, either public or private, who is rendered professional legal services by a lawyer, or who consults a lawyer * * * with a view to obtaining professional legal services.

“(b) `Confidential communication’ means a communication not intended to be disclosed to third persons other than those to whom disclosure is in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication.

“(c) `Lawyer’ means a person authorized or reasonably believed by the client to be authorized, to practice law in any state or nation.

“* * * * *

“(2) A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose facilitating the rendition of professional legal services to the client:

“(a) Between the client or the client’s representation and the client’s lawyer or a representative of the lawyer.”

The court held that, under the facts presented, the communications were from a client to an attorney made for the purpose of obtaining legal services.

The plaintiffs argued that there should be a fiduciary exception to the attorney-client privilege. Because the law firm was acting in a fiduciary capacity with the plaintiff, it should not be able to shield internal communications from discovery. The Oregon Supreme Court brushed this issue aside on the ground that there is no fiduciary exception int he Oregon Evidence Code. Instead, the court offered some guidance:

“We conclude that OEC 503(4) was intended as a complete enumeration of the exceptions to the attorney-client privilege. Insofar as that list does not include a “fiduciary exception,” that exception does not exist in Oregon, and the trial court erred in relying on that exception to compel production of communications that otherwise fell within the general scope of the privilege. It follows that the trial court’s order must be vacated to the extent that it orders production of communications that were otherwise within the privilege. The trial court remains free, however, to order production of the three communications that it found were not within the general scope of the privilege because, in essence, those communications were not made for the purpose of facilitating the rendition of professional legal services to DWT.”

In other words, the privilege applies unless it does not apply.

Edward X. Clinton, Jr.

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