The WTS is being duplicitous in their presentation of their defense, which is not a surprise...but it is very annoying when they speak out of the sides of their mouth and the court listens to them.
From reading the court document regarding the judgement on this case, the WTS made the argument that the elders were bound by the confidentiality of penitential communication.
I don't understand how that clergy privilege can be used as a defense when their own literature denies that there is a clergy within the JWs:
http://www.silentlambs.org/noclergy.htm
The Watchtower, February 15, 1994 Issue, Page 7:
It is precisely because of this close adherence to Bible teachings that the veneration and idolization of human leaders so characteristic of cults today is not to be found among Jehovah's Witnesses. They reject the concept of a clergy-laity distinction. The Encyclopedia of Religion aptly states about Jehovah's Witnesses: "A clergy class and distinctive titles are prohibited."