Red Vision Systems, Inc. v. National Real Estate Information Services, L.P.
108 A.3d 54
| Pa. Super. Ct. | 2015Background
- Plaintiffs (Red Vision Systems, Inc. and Titlevision Texas, LLC) sued three affiliated entities (NREIS, Inc.; NREIS, L.P.; NREIS of Texas, LLC) for unpaid invoices exceeding $500,000; defendants were effectively defunct/dissolved.
- Plaintiffs sought discovery about asset transfers and potential fraudulent-transfer claims and subpoenaed Thomas K. Lammert, Jr., former in‑house counsel/officer, for documents and testimony.
- Lammert moved to quash, asserting attorney‑client privilege, third‑party confidentiality agreements, and undue burden from electronic review; Plaintiffs offered a protective order and contested privilege.
- Trial court denied the motion, reasoning that no existing client persisted to protect the communications and that Lammert need not perform a burdensome privileged‑review.
- On appeal, the Superior Court accepted review only of the privilege questions (collateral‑order jurisdiction) and declined immediate review of the confidentiality and burden claims.
- The Superior Court held that attorney‑client privilege can survive dissolution only when a legal successor or someone with authority to speak for the entity remains; because no such client/successor was shown, Lammert failed to invoke the privilege and must comply.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does attorney‑client privilege survive corporate/partnership/LLC dissolution? | Privilege should not shield discovery where entity is defunct and no successor exists (Plaintiffs). | Privilege survives dissolution so long as communications are confidential and a representative can assert it (Lammert). | Privilege survives only if the entity retains continued existence by a successor or someone with authority to act for the client; otherwise it terminates. |
| May former counsel invoke/assert privilege on behalf of a dissolved entity? | Only an authorized representative or successor may claim/waive privilege; former counsel cannot unilaterally invoke it (Plaintiffs). | Former counsel may assert privilege to protect former client confidences when no other party will (Lammert). | Former counsel cannot properly invoke privilege absent proof of an existing client or authorized representative to claim the privilege. |
| Does disclosure implicating third‑party confidential/non‑disclosure information warrant immediate appellate review? | Protective interests in third‑party privacy justify appeal; protective order offered (Lammert). | This is a standard confidentiality objection, not a collateral order; protective order can address concerns (Plaintiffs). | Collateral‑order test not met for this issue; appellate review denied (issue quashed). |
| May the subpoena be quashed due to undue burden of electronic review and privilege logging? | Requiring a non‑party former counsel to perform onerous review is unduly burdensome (Lammert). | Non‑party must comply; burden alone does not justify quash here (Plaintiffs). | Collateral‑order jurisdiction not available for this claim; the court did not review it now (issue quashed). |
Key Cases Cited
- Weintraub v. United States, 471 U.S. 343 (U.S. 1985) (bankruptcy trustee can exercise managerial authority to waive corporate attorney‑client privilege).
- Levy v. Senate of Pennsylvania, 65 A.3d 361 (Pa. 2013) (purpose and predictability of attorney‑client privilege).
- Fleming v. Nationwide Mut. Ins. Co., 924 A.2d 1259 (Pa. Super. 2007) (elements and burden for asserting attorney‑client privilege).
- Cohen v. Jenkintown Cab Co., 357 A.2d 689 (Pa. Super. 1976) (privilege not absolute; disclosure may be required when administration of justice demands).
- Gillard v. AIG Ins. Co., 15 A.3d 44 (Pa. 2011) (recognizes tension between privilege and truth‑seeking; privileges construed narrowly).
- Maleski v. Corporate Life Ins. Co., 641 A.2d 1 (Pa. Cmwlth. 1994) (statutory liquidator as successor may assert/waive privilege).
- Reilly v. Greenwald & Hoffman, LLP, 196 Cal.App.4th 891 (Cal. Ct. App. 2011) (privilege survives dissolution where post‑dissolution management persists and can assert it).