PA Supreme Court rejects exception to attorney-client privilege in derivative cases

In a rare opinion on derivative litigation issues, the Pennsylvania Supreme Court on January 23 reversed a lower court decision to reject the “good cause” exception to attorney-client privilege as set forth in Garner v. Wolfinbarger, which requires production of otherwise privileged materials to plaintiffs in a derivative case upon a determination that the nine-factor test in Garner is met. The court’s ruling in Pittsburgh History & Landmarks Foundation v. Ziegler rested on the inconsistency between the Garner “good cause” exception and the basic tenets of Pennsylvania’s attorney-client privilege law because of the shadow of uncertainty the exception would cast over the privilege.

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Morgan, Lewis & Bockius LLP