There is some confusion here if Watchtower could ever claim privilege because they show that Elders are layman. Privilege is given to ministers as defined by state law and not what the religion considers so. In PA the state law for who is a minister is defined as:
§ 5943. Confidential communications to clergymen.
No clergyman, priest, rabbi or minister of the gospel of any regularly established church or religious organization, except clergymen or ministers, who are self-ordained or who are members of religious organizations in which members other than the leader thereof are deemed clergymen or ministers, who while in the course of his duties has acquired information from any person secretly and in confidence shall be compelled, or allowed without consent of such person, to disclose that information in any legal proceeding, trial or investigation before any government unit.
Even though the congregation views them as layman individuals the law does not see it that way. Just like Watchtower views themselves as a congregational religion the law has repeatedly viewed them as a hierarchical religion.
The court rejected the privilege argument, not because the court doesn't consider the elders as ministers but for two other reasons. First, was the discussion a confession because the elders were the ones that initiated the conversation and that it was not a freely expressed confession by the penitent. Second, the elder that was deposed did not preserve for the record during the deposition that he is claiming the privilege, he would still have had to answer the question during the deposition, but it would preserve the right to raise the question of privilege before the court later on.