SCUTPA: Reining in Discovery With A Self-Critical Analysis Privilege

In my last two posts, I’ve been discussing the South Carolina Unfair Trade Practices Act, its overuse, and how that overusage can ironically—yet quite foreseeably—thwart the public interest the statute is designed to protect. The problem, specifically, is that the breadth of discovery in actions involving unfair trade practices claims provides a compelling disincentive for businesses to engage in thoughtful self-critical analysis to determine if their goods or services can be provided in a way that is safer or more effective in the hands of consumers. Chilling self-critical analysis is good for no one. The question becomes: How can we give businesses the latitude they need for self-improvement in a way that doesn’t punish them for being responsible corporate citizens? One way this can be accomplished is by the creation of a qualified privilege which would shield self-critical analyses from disclosure in the course of discovery.

Now before we go any further, let me confess that this is not-in any way, shape, or form-an original idea. I have never claimed to be original, and now is no time to start. The idea of a qualified privilege for self-critical analysis dates back at least 40 years, to Bredice v. Doctors Hospital, Inc., 50 F.R.D. 249 (D.D.C. 1970). Bredice was an action for medical malpractice. During discovery, the plaintiff sought information relating to the treatment of a particular patient (who was injured by the alleged malpractice) which had been disclosed to an internal committee comprised of health care providers, as well as the notes and records of the committee regarding the patient’s care. The committee existed for the purpose of monitoring the quality of patient care generally and, perhaps more importantly, for improving standards of health care delivery going forward. The court held that the discovery requested was privileged from disclosure precisely because of the need for health care providers to speak freely about the quality of patient care. The court identified four critical elements to the existence of the qualified privilege for self-critical analysis: (1) that the analysis had been performed by the party claiming the privilege; (2) that the analysis had been conducted under the expectation of confidentiality; (3) that the information sought through discovery would probably not have been prepared if it were discoverable; and (4) that the information prepared as a result of self-critical analysis promotes a significant public interest.

Since Bredice, many states have codified a qualified privilege for health care providers, including South Carolina. See S.C. Code § 40-71-10. However, as a matter of common law, courts have rarely recognized a qualified privilege for self-critical analysis, and almost never in circumstances other than health care. If any professional field deserves a privilege for discussion involving consumer deliverables, medicine is at the top of the list. But should medicine be the only field that deserves a privilege for self-critical analysis? Surely not. Any commercial actor who has the capacity to affect the health and welfare of consumers through the delivery of their products or services should have the benefit of discussing improvement in a venue that can be free from the reach of discovery. Yet the law has been terribly reluctant to embrace any type of general protection for self improvement.

A general qualified privilege, along the same lines expressed in Bredice, would be a welcome development in terms of corporate protection. Though there is no sign that such protection is forthcoming. However, in my next post, I’ll discuss how South Carolina may have already established a framework for reining in discovery of confidential, sensitive information in actions involving the Unfair Trade Practices Act.