Friday, January 6, 2017

Back from the Brink on the Attorney Client-Privilege

County of L.A. v. Superior Court, No. S226645 (Cal. Dec. 29, 2016)

As Joe Biden might say, this 4-3 Supreme Court opinion on the attorney-client privilege is a big f@*king deal. 

I discussed this case about a year and a half ago, when it was first decided by the Court of Appeal. Although it looks at first glance like a narrow dispute about whether LA County needs to give the ACLU copies of its outside counsel bills under the Public Records Act, it will have much broader implications. That’s because the relevant PRA exception permits an agency to withhold docs subject to an Evidence Code privilege, which here zeroes in on a deep ambiguity in California’s statutes defining the attorney-client privilege.

The rub of issue is Evidence Code § 952, the key definitional provision that defines the subject of the attorney-client privilege. It defines a “confidential communication between client and lawyer,” as “information transmitted between a client
and his or her lawyer in the course of that relationship and in confidence[.]” Does that language mean that, so long as there’s a bona fide attorney client relationship where the lawyer is acting as a lawyer, all communications between attorney and client are privileged? (What I’ll call a “relationship limitation.”) Or does it also mean that, for the privilege to apply the subject of the communication also needs to have something to do with the purpose of an attorney-client relationship? (What I’ll call a “subject-matter limit.”) 

In the case, the ACLU argued that the County’s outside counsel bills weren’t made or the purposes of giving or receiving advice. While the bills might contain some info that would be subject to a subject-matter limit—info that the ACLU admitted could be redacted—bills qua bills aren’t the kind of communications that any jurisdiction with a subject-matter limit would consider privileged. And indeed those jurisdictions don’t treat bills as privileged.

The County, on the other hand, relying on text of § 952 and some broad language the Supreme Court’s 2009 Costco decision, argued that California law does not, in fact, apply a subject-matter limitation. Only a relationship limitation applies. So long as a communication is between an attorney and client in the course of their relationship, it is privileged. 

The Court of Appeal—in an opinion that reads like the court was considering only narrow PRA-related consequences—sided with the County. But as I said back in 2015, the upshot of that ruling is a massive expansion of the California attorney-client privilege over that applicable everywhere else. There was a bunch of agita in the commentary after the first case dropped, and the Supreme Court granted review. 

In a 4-3 split ruling authored by Justice Cuellar (joined by Justices Chin, Liu, and Kruger) the court holds that California privilege law, does, in fact, include some subject-matter limit. As the Court explains, the “attorney-client privilege only protects communications between attorney and client made for the purpose of seeking or delivering the attorney‘s legal advice or representation.” But how it gets there is a little bumpy.

The big problem, of course, is the text of § 952. The Court homes in on the phrase “in the course of that relationship,” which appears twice in § 952, suggesting that it means “within the scope of” the relationship, a point most recently made by Chief Justice George in a concurring opinion in Costco. The Court also notes that statutes addressed to the privilege refer, in various respects to “consultation,” as the purpose of an attorney client relationship. So without actually saying that these various references say a subject-matter limit applies, the Court finds that they “cut against an understanding of the privilege in this context as encompassing every conceivable communication a client and attorney share, and instead link the privilege to communications that bear some relationship to the provision of legal consultation.”

The Court then turns to Costco itself, which it reads to confirm that “not every communication between attorney and client is privileged solely because it is confidentially transmitted.” The court notes that Costco specifically explained that the privilege does not extend to confidential attorney-client communications where the lawyer isn’t acting as a lawyer, but instead as a negotiator, business advisor, or PR consultant. It then claims that this same distinction separates attorney-client billing communications from those pertinent to giving legal advice.

But that final step of the analogy isn’t logically or textually compelled. Costco—backed up by prior case law—was clearly right to say that communications aren’t “in the course of” an attorney-client relationship when the “attorney” is a person with a law license who isn’t actually acting as an attorney. But that is a relationship limitation. It doesn’t automatically follow, however, that a subject-matter limit must apply to any communications between a client and an attorney who is, in fact, hired to providing the client with bona fide legal services. Looking at the purpose of the relationship is not the same as looking at the purpose of any specific communication. Under the examples in Costco, courts would not apply the privilege when someone hires a lawyer to do her accounting. But it does not necessarily follow that the privilege would not apply to emails with her current trial counsel about whether the Lakers will ever be good again.

The Court also notes that the relevant statutes in the Evidence Code were enacted in 1965 to codify the existing state of the law on the attorney-client privilege. It reads cases prior to 1965 to support that point. But the case it cites and quotes as a “see, e.g.,” has the same problem as the Costco-analogy—it is potentially applying a relationship limitation instead of a subject-matter one. See Solon v. Lichtenstein, 39 Cal. 2d 75, 80 (1952) (“A communication to be privileged must have been made to an attorney acting in his professional capacity toward his client.”) (quoted at slip op. p. 16).

And then in applying the rule, the Court throws a bone to the government. It holds that, notwithstanding the fact that a subject-matter limit applies, when a litigation “remains pending and active, the privilege encompasses everything in an invoice, including the amount of aggregate fees.” According to the Court, some degree of appropriately subject-matter communications can be gleaned from basic stuff on an invoice, such as the aggregate total bill. 

But the Court then holds that the same logic isn’t true of invoices for closed cases. In these situations—without a live legal dispute to “shed light on the context from which such records are arising”—there’s less potential to reverse engineer legal advice and strategy from billing totals. The court reasons that, although the privilege doesn’t expire, when a litigation ends, the nature of the information in context changes. It becomes increasingly less likely over time that the disclosure of the basic information like aggregate bill totals would reveal anything meaningful about the kinds of communications that are in the heartland of the privilege.

Justice Werdegar (joined by Justice Corrigan and the Chief Justice) dissents. Pretty strongly. She accuses the Court of adding a subject-matter requirement “as an additional, nonstatutory element to the Legislature‘s definition of a confidential communication,” a result
unsupported by law. She notes that the Court’s textual analysis of the statute is problematic and in tension with Costco. And she argues that the Court’s holding that invoices for pending litigation are privileged while those for completed litigation are not, just doesn’t make very much sense. Indeed, as a result of the Court’s opinion, she warns that attorneys in this state” must counsel their clients that confidential communications between lawyer and client, previously protected by the attorney-client privilege, may be forced into the open by interested parties once the subject litigation has concluded.”

Court of Appeal reversed.

As I noted in my prior post, this case is at the crux of a tricky problem. On one hand, it’s not that easy to make the statutory text come out the way the majority thinks it should. If the drafters meant “related to the purpose of the relationship,” using the phrase, “in the course of that relationship” is just not an ideal way to express the point. On the other and, the core of the Court’s holding—that the privilege requires a subject-matter limit—is clearly right as a matter of policy, and it seems absurd that the Legislature intended to privilege attorney-client discussions about baseball. Indeed, even prior to the Court of Appeal’s opinion in this case, California’s read on the attorney-client was already significantly broader than that of other U.S. jurisdictions. And when combined with Evidence Code § 915(a)’s bar on in camera review, the lack of a subject-matter limit would have the practical effect of making essentially every communication between an attorney and client privileged without potential for challenge, so long as the attorney’s principal role in the relationship was as a lawyer and not some other capacity. All any privilege would need are “to” and “from.”

(I’m less in the Court’s court with the pending vs. competed litigation issue. The dissent does make a good point that it does not make much sense for the privilege to rest on the shifting sands of how useful the information might be to one’s adversary at a particular time. Frankly, I think that part might have been a compromise to get a fourth vote—a point that comes out somewhat if you watch the Supreme Court oral argument, which can be found here.)

Anyway, I wonder if a little more could have be done do show that “in the course of that relationship” reflected an intent to impose a subject matter limit. Although the neither the court nor the dissent say so, I think it’s fair to say that the phrase is at least ambiguous as to whether it codifies only a relationship limitation or whether it can also be understood to include a subject-matter one, particularly when considered contextually with all of the other references to the purpose of the privilege pointed out in the Court’s opinion. But from a purely textual perspective, reading it to include a subject matter limit is certainly not the easiest read to apply. So there should be something that supports the somewhat less natural reading as the correct one.

A deeper dive on the history would help. The relevant language was added in the bill that accomplished the original 1965 codification of the Evidence Code. See Kaplan v. Superior Court, 6 Cal. 3d 150, 157–58 (1971) (explaining history). The privileges article of the Code was modeled on the 1953 Uniform Rules of Evidence, as revised by the California Law Revision Commission. (The Commission’s 1963 report on the issue can be found here.) The Court is correct that the provision was more or less meant to codify the common law. As the Commission’s report explains:

The requirement that the communication be found to be between a lawyer and his client in the course of that relationship and in professional confidence had been stated as a condition to the exercise of the privilege. This is in accordance with the existing law which requires a showing by the person invoking the privilege both of the lawyer-client relationship and of the confidential character of the communication. 
The report then cites two cases, the older of which holds that for a communication to be privileged “[i]t must appear that the witness learned the matter in question only as counsel, or attorney or solicitor for the party, and not in any other way, and that it was received professionally[.] Sharon v. Sharon, 79 Cal. 633, 677 (1889). That is consistent with the 1872 privilege statute in force at that time Sharon was decided. See Cal. Code Civ. Proc. § 1881(2) (1872) (“An attorney cannot, without the consent of his client, be examined as to any communication made by the client to him, or his advice given thereon in the course of professional employment.”). On this point, Sharon cites an even older pre-codification California Supreme Court case that says: “Prima facie, all communications made by a client to his attorney or counsel, connected with the purposes with a view to which the relation was entered into, must be regarded as confidential.” Hager v. Shindler, 29 Cal. 47 (1865) (emphasis added). So it appears that a subject matter limitation—a requirement that a communication be “connected with the purposes with a view to which the [attorney-client] relation was entered into”—existed in both the California statutory and common law that the 1965 Legislature intended to codify when it adopted the Commission’s recommendations.

It’s also worth noting that the “in the course of that relationship” formulation was adopted unaltered from the 1953 version of Uniform Rule 26. By the 1970s, most states adopted evidence rules based on the Federal Rules of Evidence, and the Uniform Rules were amended to mirror them in 1974. But two other states adopted the earlier 1953 Uniform Rules—Kansas and New Jersey. See 21 K. Graham, Federal Practice & Procedure: Evidence § 5005. The Supreme Courts of both of those states have read the same language to include a subject matter limitation. See Fellerman v. Bradley, 99 N.J. 493, 499 (1985) (requiring a communication to be “in conjunction with seeking or receiving legal advice from the attorney in his capacity as such”); Cypress Media, Inc. v. City of Overland Park, 268 Kan. 407, 418–19 (2000) (reading Kansas’s codification of Uniform Act to require a subject-matter limitation).

Finally, the state Constitution contains an interpretive rule enacted by a 2004 ballot proposition, directing that a statute “shall be broadly construed if it furthers the people’s right of access, and narrowly construed if it limits the right of access.” Cal. Const., art. I, § 3(b)(2). The Supreme Court has previously read this provision to mean that if a statue addressed to public access is ambiguous, the Court must “interpret it in a way that maximizes the public’s access to information unless the Legislature has expressly provided to the contrary.” Sierra Club v. Superior Court, 57 Cal. 4th 157, 175 (2013) (quotations omitted, emphasis original). Interestingly, the majority here cites the provision in its discussion the PRA, but never applies it in its discussion of § 952, although the point was pressed in the ACLU’s brief. Perhaps the issue was that, although the ultimate issue is one of public access under the PRA, the relevant ambiguity is contained in § 952, an Evidence Code provision that applies to alike both public and private assertions of the the attorney-client privilege. So § 952 doesn’t always address the people’s right to access.

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