Scott Stands As Stark Warning: E-Mails Exchanged Over Client's Employer's E-Mail System May Not Enjoy Privileged Status
December, 2007
Scott v. Beth Israel Medical Center, --- N.Y.S.2d ----, 17 Misc.3d 934, 2007 WL 3053351 (N.Y.Sup.), 2007 N.Y. Slip Op. 27429 (October 17, 2007), raised new issues concerning CPLR 4548 - specifically, whether e-mail communications between a client and his/her attorney via the use of employer-based electronic systems enjoys privileged status. CPLR 4548 provides that “[n]o communication otherwise privileged under this article shall lose its privileged character for the sole reason that it is communicated by electronic means or because persons necessary for the delivery or facilitation of such electronic communication may have access to the content of the communication.” See, Alexander, Practice Commentaries, CPLR 4548 (McKinney’s 1999). Generally, the statute permitted conveyance of privileged communications through electronic media such as e-mail, even though such communications are transmitted by third-party servers and lack the type of privacy normally required for the privilege to attach.
CPLR 4548 drew little judicial attention since adopted by the Legislature approximately ten years ago until the recent Scott case. Scott involved a physician who brought an action against his affiliated hospital. Id. The physician and his attorney exchanged e-mails over the hospital’s e-mail system. Id. The hospital did not initially review the e-mails until after litigation commenced, at which time the e-mails came into the possession of the hospital’s attorneys and the issue of whether the e-mails enjoyed privileged status was raised. Id. at 1. The physician argued that CPLR 4548 bestowed privileged status upon the e-mails. Id. In rejecting the physician’s argument, the Court held that the e-mails were not privilege because the hospital had a policy of prohibiting personal use of its e-mail, phone and fax systems and a policy that such communication can be viewed by the employer. Id. at 4.
In reaching its decision, the Court applied the four-part test articulated in In re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (Bankr. S.D.N.Y. 2005): “(1) does the corporation maintain a policy banning personal or other objectionable use; (2) does the company monitor the use of the employee’s computer or e-mail; (3) do third parties have a right of access to the computer or e-mails; and (4) did the corporation notify the employee, or was the employee aware, of the use and monitoring policies.” Id. Applying the four-part test to the facts in Scott, the Court concluded that the hospital’s policies were sufficient to affect a waiver of the privilege, despite the fact that the physician was unaware of the policies. Scott, at 4. Essentially, the Court concluded that CPLR 4548 did not protect the communications at issue because of the existence of a hospital policy prohibiting personal use of the e-mail system, coupled with the proviso that the e-mail may be monitored. Id. The Court determined that the employer’s prohibition of personal use “combined with a policy allowing for employer monitoring and the employee’s knowledge of these two policies diminishes any expectation of confidentiality.” Id. Hence, the Court held that the hospital’s policies destroyed an essential element of the privilege, and did not allow for a reasonable expectation of privacy. Id. The Court further reasoned that while the statute protects e-mail communications sent by electronic means that may involve third-parties who transmit them, it does not prevent the communications from losing their privileged status for other reasons, such as a lack of privacy. Id.
The Court’s analysis appears to rely significantly upon the issue of the reasonable expectation of confidentiality, a critical element for most privileges. CPLR 4548 implicitly recognizes that, without explicit statutory protection, electronic communications might not be sufficiently secure to permit a privileged communication. Unlike traditional mail communications, electronic communications are generally not sealed and can be reviewed by those with access to the system. CPLR 4548 resolves this issue by creating an exception to the traditional confidentiality requirement, providing that the privilege is not lost “because persons necessary for the delivery or facilitation of such electronic communication may have access to the content of the communication,” such as a third-party administrator. CPLR 4548.
Thus, a communication provider’s reservation of the right to access the communication is not sufficient to destroy the privilege. Moreover, an employer’s reservation of the right to monitor e-mail sent over its e-mail server, or phone calls made from its phone system, must be measured against CPLR 4548’s proviso. Since the person maintaining an e-mail server or phone system is necessary for the delivery or facilitation of the communication, the reservation of the right to access the communication by such person, even if the person is an employer, does not vitiate the privilege under CPLR 4548. In Curto v. Medical World Communs., Inc., 2006 WL 1318387, U.S. Dist. LEXIS 29387 (E.D.N.Y.), the U.S. District Court for the Eastern District of New York confronted a situation where an employer provided its employees laptops for the purpose of working from home. Similar to Scott, the employer in Curto had a policy that its employees had no expectation of privacy in company computers, and that communications from company computers can be monitored. Id. at 1. The employee returned the laptop to the employer, but deleted her e-mail communications with her attorneys. Id. The employer had the e-mails on the laptop reconstructed after the employee filed suit. Id. Notwithstanding the employer’s monitoring policy, the Curto court ruled that the privilege was not waived because monitoring was not enforced, and many employees had been lulled into a sense of security into using personal e-mail accounts at work. Id. at 2.
Scott differs from Curto, however, in that two salient features of the Curto case were that: (1) the employee was working from home; and (2) the e-mails were not transmitted through a company-based e-mail server, making it impossible for the company to actually monitor the e-mails at the time they were sent. Id. at 3. The Curto court reasoned that actual enforcement of the monitoring policy was an important consideration as to the applicability of the privilege. Id.
While Scott, Curto and Asia Global Crossing all involve actions by employees against employers, the logical conclusion is that if the use of an employer’s electronic communication system for non-employment matters waives the privilege with respect to the employer, then it waives the privilege entirely. Accordingly, an employee’s e-mail transmitted over the employer’s system may not be privileged at all, even with respect to non-employer litigation.
Learning Point:
The court’s analysis in Scott may appear reasonable, but the question remains as to whether it can withstand scrutiny. Scott currently stands as a stark warning that communications transmitted via the employer’s e-mail system may not be privileged. Notwithstanding CPLR 4548, electronic means of communications between attorneys and their clients may not enjoy privileged status unless legislation further extends CPLR 4548, or the Scott decision is reversed or overruled.
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