Madden v. Creative Services, Inc., 84 N.Y.2d 728 (1995): No Cause of Action for Third-Party Intrusion on Attorney-Client Privilege Absent Harm

84 N.Y.2d 728 (1995)

New York does not recognize a cause of action for damages solely for a third party’s intrusion on the attorney-client privilege, absent a showing of harm directly resulting from a breach of that privilege.

Summary

Madden, opposing a movie theater construction, hired attorney Kenny. National Amusements, seeking to discredit Madden, hired Creative Services, whose investigators unlawfully entered Kenny’s office and photographed documents. Madden sued, alleging intentional interference with the attorney-client privilege. The New York Court of Appeals held that no cause of action exists for a third party’s intrusion on the attorney-client privilege without demonstrating harm directly caused by the breach of privilege. The court emphasized the importance of balancing interests and cautioned against creating vast, uncircumscribed liability. Existing remedies adequately deter such invasions, and the alleged harm stemmed from trespass, not a breach of confidentiality.

Facts

George Madden formed a coalition against National Amusements’ movie theater project, hiring attorney Francis Kenny. National Amusements hired Creative Services to investigate Madden, allegedly to find connections to a competitor. Creative Services investigators, Howe and Cole, surveilled Madden and Cohen, then unlawfully entered Kenny’s office, posing as ring-seekers, and photographed documents about the zoning dispute.

Procedural History

Madden and Cohen sued Creative Services, its president, the investigators, National Amusements, and its president in the United States District Court for the Western District of New York. The District Court dismissed the complaint for failure to state a claim. The Second Circuit certified two questions to the New York Court of Appeals: (1) whether a cause of action for invasion of the attorney-client privilege was stated and (2) whether economic loss was an element of such a cause of action.

Issue(s)

1. Whether a cause of action exists for invasion of the attorney-client privilege when a third party intrudes upon confidential communications but does not disclose them or otherwise cause specific harm related to the breach of privilege?

Holding

1. No, because a cause of action for intrusion on the attorney-client privilege requires some element of harm to the plaintiffs that arises directly from a breach of this privilege, which was not demonstrated here.

Court’s Reasoning

The Court of Appeals declined to create a new tort claim for third-party intrusions on the attorney-client privilege. While the confidentiality of attorney-client communications is important, existing remedies adequately deter such invasions. The court noted that the attorney-client privilege is codified in CPLR 4503 as an evidentiary privilege that protects against disclosure of confidential communications only in specified proceedings. The Court emphasized that it exercises its common-law tradition and responsibility to impose a new tort duty with care, mindful of the potential for vast, uncircumscribed liability. “To identify an interest deserving protection does not suffice to collect damages from anyone who causes injury to that interest.” Here, the plaintiffs alleged damage resulting from a generalized fear for personal safety and security, not from the breach of the attorney-client privilege itself. “A new cause of action for intrusion on the attorney-client privilege should at least require some element of harm to plaintiffs that arises directly from a breach of this privilege.” The court noted available criminal penalties for unlawful intrusion, disciplinary sanctions for attorneys failing to secure client documents, and existing causes of action like intentional infliction of emotional distress and conversion, although not applicable on these facts. The Court concluded that the plaintiffs were attempting to circumvent established privacy law without demonstrating a need to protect the private interest at issue or prudence as a matter of public policy.