Attorney Client Privilege Covers Consultants

November 29, 2000 Published Work
The Connecticut Law Tribune, Environmental Law Magazine, November 2000

Writing for a unanimous Connecticut Supreme Court in a decision dated August 8, 2000, Justice Katz found that a report prepared by an environmental consultant, retained by a corporation's outside counsel to help respond to a Department of Environmental Protection inquiry, is protected by the attorney-client privilege. Olson v. Accessory Controls and Equipment Corporation et al, 254 Conn. 145, 757 A2d 14 (2000). The opinion is also noteworthy for, among other things, recognizing that communications otherwise covered by the attorney-client privilege lose their protected status when they are intended to further a civil fraud.

The following is a brief summary of Olson and its holdings as it relates to privilege and the environmental consultant, together with suggestions for the future engagement of the environmental consultant.

In the fall of 1989, the DEP did an on-site inspection of Accessory Controls' Windsor plant. Its findings were contained in an inspection report, which identified "two areas of concern regarding hazardous waste discharge and storage activity." The DEP issued an order to Accessory Controls requesting, among other things, a remedial plan for the handling, storage, removal, and proper disposal of the hazardous waste. Thereafter, Accessory Controls hired outside counsel, Carol W. Briggs.

In the course of her representation, Briggs engaged an environmental consulting firm to conduct and independent analysis of the site. The consultant's report not only addressed the areas identified by the DEP, but it also contained information about other areas of the plant. After it refused to issue separate reports, Briggs dismissed the consultant and instructed it that its report should not be released to the DEP in its entirety. She submitted to the DEP the report of another environmental consultant, which responded more closely to the bounds of the DEP's inquiry.

In 1992, after having acquired an ownership interest in Accessory Controls, Teleflex Lionel-DuPont S.A. sent representatives to the Windsor plant. It had promised that all communications with Accessory Controls' employees would be kept confidential and would not result in "reprisal or negative employment action." While at the facility, the representatives questioned William Olson, Accessory Controls' Windsor plan manager, as to storage and disposal of hazardous waste at the plant. Apparently relying on their assurances of confidentially, Olson informed the representatives of past improper storage and disposal at the plant and of the original environmental consultant's report. Senior management was informed of Olson's admission and, allegedly as a means of retaliation, eliminated his position after unsuccessful attempt to elicit his resignation. Olson in turn commenced an action, claiming wrongful discharge.

Before trial, the court granted Accessory Controls' motion to preclude Olson from disclosing communications between Briggs and the original consultant. Accessory Controls then successfully moved to dismiss the action. In affirming the lower court, the Appellate Court concluded that the original consultant had been "made in confidence for the purpose of seeking legal advice." Thus, that court found that such communication was covered by the attorney-client privilege. This "despite the fact that Briggs was hired by, and a representative of, [Accessory Controls,] itself a corporate entity, and despite the fact that the communication was not made by the client itself to the attorney."

The Appellate Court declined to rule on the issue of whether the communications fell within the civil-fraud exception to attorney-client privilege (recognized in federal court and other jurisdictions). But the Supreme Court extended state law to adopt the exception. Nonetheless, the high court, stating that the record did not indicate that Accessory Controls sought advice "with the intent to perpetrate a fraud on the department by withholding information," found that Briggs' conduct failed to rise to the level of civil fraud.

The rulings in Olson may be of interest to those practitioners in the position to hire environmental consultants. The rulings show that environmental assessments done by consultants hired on behalf of a client are privileged when they are meant to assist in the preparation of a remediation order from the DEP. Moreover, the opinion implies that the attorney-client privilege will be applied even though such environmental reports may contain only factual information and may be used for purposes other than attorney-client communications. In bringing the communications at issue within the attorney-client privilege, the court accented the fact that the information ws squarely linked to the preparation of legal advice for Accessory Controls and that the consultant ws hired by Briggs rather than Accessory Controls. The opinion also notes that the engagement letter set forth the consultant's role as an advisor that that information gathered as part of the investigation of the Windsor facility would be held in confidence.

Of particular significance to the practitioner is the language of the engagement letter cited by the court when it found that communications from the consultant to either Briggs or Accessory Controls were confidential. For example, Justice Katz quoted the trial court's statement that the engagement letter was "replete with admonitions that all communications with respect tot eh [consultant] and his office and [Briggs] and between [the consultant] and any attorney, agent or employee acting for [Accessory Controls] are to be confidential and made solely so that counsel for [Accessory Controls] can advice."

We do not suggest that Olson is the last word on when and if communications under a letter of engagement between an attorney and environmental consultant will be shielded by the attorney-client privilege. Rather, we propose that careful reading and analysis of Olson may help practitioners think about how best to engage environmental consultants.