October 28, 1994
Mr. Fredrick G. Johnson Attorney at Law
P. O. Box 332 Dobson, NC 27017
RE: Advisory Opinion; Open Meetings Law; N.C.G.S. §143-318.11(a)(3); Permissible Closed meeting Discussions Between the Attorney and Client
Dear Mr. Johnson:
I reply to your October 24 letter requesting advice on whether the Stokes County Board of Education lawfully discussed in closed session matters concerning attorney-client privileged communications. The communications involved a proposed contract between the Board of Education and a third party. Put another way, must the closed session discussions between a public body and its attorney be limited to potential or actual lawsuits.
For reasons which follow, we concur with your conclusion that a public body may go into closed session with its attorney to discuss any matters otherwise included within the attorney-client privilege, including a discussion regarding the validity of a proposed contract and the respective rights and obligations of the contracting parties.
One of the permitted purposes for which a public body may go into a closed session is:
"To consult with an attorney employed or retained by the public body in order to preserve the attorney-client privilege between the attorney and the public body, which privilege is hereby acknowledged. General policy matters may not be discussed in a closed session and nothing herein shall be construed to permit a public body to close a meeting that otherwise would be open merely because an attorney employed or retained by the public body is a participant. The public body may consider and give instructions to an attorney concerning the handling or settlement of a claim, judicial action, or administrative procedure. If the public body has approved or considered a settlement, other malpractice settlement by or on behalf of a hospital, in closed session, the terms of that settlement shall be reported to the public body and entered into its minutes as soon as possible within a reasonable time after the settlement is concluded."
N.C.G.S. §143-318.11(a)(3).
It could be argued that the specific mention of "a claim, judicial action, or administrative procedure" in (a)(3) limits the use of the attorney-client privilege to those specific matters. We do not, however, consider this to be the better argument. We believe the language that "[t]he public body may consider and give instructions to an attorney concerning . . . a claim, jurisdiction, or administrative procedure" indicates legislative intent not to limit this exception to advice on those three matters. The legislative history of this particular provision also supports this conclusion. As very ably put by David Lawrence in his recent Local Government Law Bulletin, Number 64 (September 1994) publication, "1994 Changes to the Open Meetings Law", at page 6: "In its original version, in HB 120 as introduced, the provision read as follows:
to permit a public body to receive advice from an attorney employed or retained by the public body with respect to a judicial proceeding in which the public body has a direct interest.
The original bill was then modified in committee, and the committee substitute read as follows:
to permit an attorney employed or retained by the public body to provide legal advice with respect to (i) the public body’s rights and obligations pursuant to an existing or proposed contract to which the public body is or will be a party; or (ii) a pending, threatened, or contemplated judicial proceeding in which the public body has a direct interest.
In the first of these it is clear that discussions with attorneys were limited to judicial proceedings, and in the committee substitute’s version, such discussions were limited to judicial proceedings and to contract negotiations.
The bill was amended on the House floor, however, and the engrossed bill that reached the Senate had the following provision:
to preserve the attorney client privilege between the attorney and the public body [emphasis added], or to permit an attorney employed or retained by the public body to provide legal advice with respect to (i) the public body’s rights and obligations pursuant to an existing or proposed contract to which the public body is or will be a party; or (ii) a pending,threatened, or contemplated judicial proceeding in which the public body has a direct interest.
The floor amendment left the language of the committee substitute in place but added, for the first time, the provisions (italicized above) that deal with matters within the attorney-client privilege. The conclusion is inescapable that the language allowing closed sessions for matters within the privilege was intended to reach beyond discussions of litigation and contract matters.
The language was changed once again in the Senate committee, so that the Senate committee substitute contains the language of the ratified session law:
to consult with an attorney employed or retained by the public body in order to preserve the attorney-client privilege between the attorney and the public body, which privilege is hereby acknowledged . . . The public body may consider and give instructions to an attorney concerning the handling or settlement of a claim, judicial action, or administrative procedure.
Although the language is modified, the purpose seems to be for clarification rather than to make substantive changes, and this version continues the separation between discussions within the attorney-client privilege and discussions of claims and litigation. Therefore it is clear that attorney-client discussions, within the privilege, need not be restricted to claims, judicial actions, or administrative procedures."
For the reasons stated by Mr. Lawrence, we believe that the legislature intended to allow a public body to go into closed session with its attorney to discuss the legalities of a proposed contract.
N.C.G.S. §143-318.11(a)(3) does not, however, permit a public body to close a meeting for any
discussion with an attorney. The exception is limited by the scope of the attorney-client privilege
as defined by the common law. Thus, there must be an attorney-client relationship between the
public body and the attorney; the communications that are the subject of the closed session must
concern legal advice in the course of the professional employment; the communications must be
confidential; and the public body must not have waived the privilege. See generally, 97 C.J.S.
Witnesses, § 283. If any of these requirements are not present, the privilege does not exist and
exception (a)(3) may not be used by a public body to go into closed session. We understand from
your request that all of these requirements were present in the discussion you recently had with
the Stokes County Board of Education in closed session.
Should you have any questions, please feel free to contact us.
Andrew A. Vanore, Jr.
Chief Deputy Attorney General
John R. McArthur
Chief Counsel