Pa. Supreme Court Refuses to Narrow Attorney-Client Privilege in Derivative Cases
Court says adoption of “good cause” inquiry into exceptions would lead to impermissible uncertainty of the rule
The Pennsylvania Supreme Court has refused to join several other jurisdictions in accepting a “good cause” inquiry to provide exceptions to the basic rule of attorney-client privilege in derivative action cases. It has held that providing such a “conditional privilege” would reduce the certainty of the attorney-client privilege. The question has arisen in a derivative action brought by several former directors of a pair of Pittsburgh nonprofits who claimed that they were removed for attempting to challenge the management of the organization’s president. They claimed that the others on the board breached their fiduciary duty to the organization by improperly removing those questioning...
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