Privilege for the Attorneys' Attorneys

Edwards Wildman Palmer v. Superior Court, No. B255182 (D2d3 Nov. 25, 2014)

In this malpractice case, the trial court granted a motion to compel ordering a law firm to disclose intrafirm communications between various firm lawyers and the firm’s in house general and claims counsel. The emails related to potential malpractice claims threatened by a then-current client, who has now brought malpractice claims against the firm.

The court of appeal grants a writ. Although there are federal cases that rely on the ethical obligations of attorneys to their clients to create an exception to the privilege for intra-firm advise on potential malpractice issues, California does not afford a statutory exception on those grounds. As California courts have made clear, the attorney-client privilege is a creature of statute, and subject only to those exceptions that the legislature chooses to enact into law. Indeed, under somewhat different circumstances, the California Supreme Court rejected the argument that a fiduciary cannot assert the attorney client privilege against its beneficiary over its communications with its own counsel. Wells Fargo Bank v. Superior Court, 22 Cal. 4th 201 (2000). Because there was no statutory exception on this basis, the court would not create one.

Finding RFF Family Partnership, LP v. Burns & Levinson, LLP, 465 Mass. 702 (2013) to be persuasive, the court considers four (non-exclusive) factors that are germane to whether firm in-house attorneys can maintain an attorney-client relationship with other firm lawyers for the purpose of claiming privilege. These factors include: (1) whether certain lawyers have been designated to represent the firm as in-house or ethics counsel; (2) whether these attorneys have provided prior advice to the potentially adverse client; (3) whether the time spent on the internal communications is billed to the client; and (4) whether the communications are made in confidence and kept confidential.  Applying these considerations, the petitioner established an attorney-client relationship under the facts of the case.

Finally, the court holds that the exceptions to the attorney client privilege in Evidence Code §§ 958 (communications related to breach of duty) and 962 (joint client) are inapplicable.  The breach of duty exception applies only to otherwise privileged communications between attorney and her client insofar as they related to an attorney-client dispute. It does not apply to communications between an attorney and its own separate counsel.  Nor were the plaintiff and the attorneys joint clients. They were not co-parties in any case and they did not retain the firm jointly on a matter of common interest.

Writ granted.