No Adverse Inferences

Carroll v. Comm’n on Teacher Credentialing, No. C083250 (D3 Oct. 23, 2020)

An employee of a state agency claims she was fired in retaliation for reporting misconduct to statue auditors. As required by statutes governing public employees, she first presented her claims to the State Personnel Board, which rejected her complaint. She then filed a civil action, which included both state claims and a claim under 42 U.S.C. § 1983. Agency removed the case to federal court, which dismissed the § 1983 claim for failure to state a claim and then remanded to state court. A state court jury subsequently found in her favor and awarded significant damages.

The Agency raises two preclusion issues, but neither carries the day. First, the Agency says the federal court’s dismissal of the § 1983 claim is claim preclusive (res judiciata) to the state law claims because they invoke the same primary right. But primary rights are a state court thing and the preclusive effect of a federal court ruling is decided by federal, not state, law. Federal courts say that the grant of a 12(b)(6) motion is not sufficiently on the merits to give rise to res judicata. So no preclusion.

The Agency also says that the Personnel Board’s denial created issue preclusion (collateral estoppel) issues. The statutory scheme that governs state employees does requires a Personnel Board complaint as a predicate to suit. But an employee has no right to appeal an adverse decision from the Board, and state law does not treat any subsequent civil suit as a review of the Board’s decision. Given that scheme, the California Supreme Court has held that Personnel Board decisions are insufficiently final to satisfy the finality element of issue preclusion. See State Bd. of Chiropractic Examiners v. Superior Court, 45 Cal. 4th 963, 975–76 (2009).

But Plaintiff isn’t out of the woods. During the trial, Plaintiff’s lawyer asked several of the Agency’s witnesses about their intentions for seeking legal advice related to Plaintiff from the Department of Personnel Administration—basically the state’s employment/HR counsel. When the witnesses would not answer the question on privilege grounds, the attorney sarcastically questioned them about what advice they were not seeking. The trial court let the questioning occur. It then refused to instruct under Evidence Code § 913, which says that a jury should be instructed not to draw any inference from the valid exercise of a privilege. In both questioning and argument, Plaintiff’s counsel implied an inference that the failure to disclose the purpose of the advice suggested something sinister was afoot.

That was error. Indeed, prejudicial error. You can’t make a witness decide between revealing privileged communications and letting an opponent draw negative inferences from a refusal to waive the privilege. Although the court gave a general closing instruction (CACI 215) about not drawing inferences regarding the invocation of the attorney-client privilege, the sheer amount of questioning on the issue, combined with the trial court’s refusal to specifically instruct under § 913 rebutted the general presumption that juries will follow their instructions. And because this testimony went to the heart of the case—the Agency’s motivation for firing Plaintiff—the error was clearly prejudicial, thus meriting reversal.

Reversed.

Christynne, I am not your lawyer...

Wood v. Superior Court, No. D076325 (D4d1 Mar. 13, 2020)

Plaintiff, a transgender woman, lodged a FEHA complaint against her gym with the DFEH. DFEH decided to bring suit. Plaintiff intervened. In discovery, Plaintiff claimed attorney-client privilege over some of her communications with the DFEH’s lawyers. The trial court overruled the privilege. Plaintiff took a writ, which the Court of Appeal denies. 

The DFEH’s lawyers represent DFEH, not Plaintiff, a fact of which Plaintiff was apparently aware. Plaintiff might well have sought legal advice from the DFEH counsel. But that’s not enough to bring the communications within the privilege. By statute, a communication is subject to the attorney-client privilege only if it is “made in the course of an attorney-client relationship.” Evidence Code § 352. If there’s no reason to believe that an attorney client relationship existed between Plaintiff and the lawyers, there’s no privilege from the getgo.

Writ denied.

Prophylaxis, Not Punishment

City of San Diego v. Superior Court, No. D073961 (D4d1 Dec. 19, 2018) 

Plaintiff is a detective, bringing some employment-related litigation with city’s police Department. Plaintiff’s lawyer also represents someone claiming that the Department fouled up a child sex assault investigation. As part of the leak investigation, Department's internal affairs interviewed Plaintiff, suspecting that she might be the leaker. The IAB folks ask about Plaintiff's conversations with her lawyer. Over her objections, they tell her―on insinuated threat of discipline―that she needs to answer. And she does. Some of these interviews were attended by a Deputy City Attorney. Plaintiff was repped in the interviews by a union lawyer, but her employment litigator was not present.

Plaintiff then moves to DQ the City Attorney’s office in the employment case, for invading her privilege. It not particularly debatable that City improperly violated Plaintiff’s attorney-client privilege. Moreover, because Deputy City Attorney participated in questioning Plaintiff about matters related to litigation when Plaintiff's lawyer wasn’t there, the Deputy violated Rule of Professional Conduct 2-100, which prohibits an attorney from communicating with a represented party.

That all said, a transcript of the interview was filed with the Court in camera. Whatever was elicited had nothing whatsoever to do with Plaintiff's employment case. Because DQ is premised on an opponent’s obtaining an unfair advantage, getting privileged, but irrelevant, info shouldn’t merit disqualifying the City Attorney's office. If there’s no prejudice to the ligation, whether the City Attorney should be subject to some sanction for violating the rules is not the Court’s role. That’s for the State Bar.

Affirmed.

Privilege Log Necessary, Regardless of Burden

Riddell, Inc. v. Superior Court, No. B275482 (D2d7 Aug. 23, 2017)

Insurers filed a declaratory relief action regarding a coverage dispute with an Insured that manufactures football helmets. The rule is pretty well settled that, to the extent that there are factual questions in the DJ that overlap the underlying litigation, the DJ case must get stayed to avoid prejudice to the insured in having to litigate the merits as part of the coverage dispute. That said, the issue doesn’t come up very often because usually a coverage DJ action can be resolved as a matter of law based just on the policy language and the underlying complaint.

I Guess It's Not Over

Cnty. of L.A. Bd. of Supervisors v. Superior Court, No. B257320A (D2d3 Jun. 22, 2017)

This is the remand in County of L.A. v. Superior Court, the Supreme Court’s big decision on the scope of the attorney client privilege from the end of 2016. As when this case was before the Court of Appeal the first time around, the panel seems inclined to read the privilege expansively, even after getting reversed for doing that the first time around.

State Fund Strikes Again

McDermott Will & Emery LLP v. Superior Court, No. G053623 (Apr. 18, 2017)

The underlying litigation in this writ is a malpractice case arising from messy probate fight over the control of a family office. It involves way too many names and a whole lot of factual detail, but I’ll try to simplify as best as I can, without losing the key flavor as relevant to the procedural issues, which deal with the disqualification of one party’s lawyers for failing to return privileged materials.

Who’s the Client?

Fiduciary Trust International v. Klein, No. A144558 (D1d3 Mar. 21, 2017).

In a trust dispute, a fired trustee declines to give certain documents to his successor, on the grounds that they are subject to the attorney-client privilege. Generally in such cases, the “client” is the office of the trust, not the particular trustee, so a former trustee has no privilege against its successors. There’s an exception, however, for when a trustee obtains personal legal advice about his trusteeship from counsel paid out of its personal funds. The question here is how broad should the exception be and who bears the burden of establishing it.

Based on trust law principles, the court holds that the trustee invoking the privilege must prove the exception and that it applies only when the trustee can demonstrate that it “retained the counsel with whom [it] communicated in a personal capacity and took affirmative steps to distinguish the purported personal advice from advice obtained in a fiduciary capacity.” The court says that the trustee doesn’t necessarily need to go so far as to physically segregate documents (although it’s probably a good idea) but it must take actual steps to identify as privileged communications that are sought from the trustee’s personal-capacity counsel.

Reversed in part for analysis based on the standard in the court’s opinion.

Don’t Quack to the Flack

Behunin v. Superior Court, No. B272225 (D2d7 Mar. 14, 2017)

Although it might not be litigated very often in state court, this question comes pretty frequently in high-stakes litigation: When do communications with PR people hired in connection with a litigation come under the cover of the attorney-client privilege?

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. 

A Writ Lesson, of Sorts

Agric. Relations Bd. v. Superior Court, No. C08373 (D3 Oct. 25, 2016)

This is a writ taken from an administrative proceeding addressed to a question of governmental attorney client privilege. But before we get there, there’s a question of writ procedure.

Clawback Principles Apply in PRA Petitions

Newark Unified School Dist. v. Superior Court, No. A142963 (D1d1 Jul. 31, 2015)

In an opinion that dives deep on legislative history issues outside the scope of our coverage, the court of appeal holds that clawback principles applicable to ordinary civil cases apply to privileged documents that are inadvertently produced in response to requests under the Public Records Act.

Our Bills Are Now Privileged

County of L.A. Bd. of Supervisors v. Superior Court, No. B257230 (D2d3 Apr. 13, 2015)

I’m not sure the court of appeal realizes it, but this opinion massively expands the scope of the attorney client privilege in California.

With Adversaries Like this, Who Needs Client Conflicts?

Acacia Patent Acquisition, LLC v. Superior Court, No. G050226 (D4d3 Feb. 27, 2015)

This is a conflicts riddle much harder than anything on the MPRE. 

You Waived What‽

Anten v. Superior Court, No. B258437 (D2d1, as modified Feb. 10, 2015)

This is a short writ ruling on a privilege issue. It is largely based on common sense. But it has the potential to be significant when it comes to joint representations.

The question: Attorney represents Clients ## 1 and 2, who have a common interest in the same matter. After the representation ends, Client #1 sues attorney for malpractice, but Client #2 does not. In the malpractice lawsuit, can client #2 invoke the attorney-client privilege and preclude the discovery and evidentiary use of joint attorney-client communications?

The court says no. The situation falls within the literal wording of Evidence Code § 958, which says that “[t]here is no [attorney-client] privilege . . . as to a communication relevant to an issue of breach, by the lawyer or by the client, of a duty arising out of the lawyer-client relationship.” The fact that there’s a second co-client who alleges no breach does not bode otherwise, whether as a matter of statutory interpretation, or as a matter of policy. Otherwise, the non-disputing client could confound the attorney’s malpractice defense by invoking a privilege that was otherwise waived by the disputing client. That would not be fair.

Writ granted.

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.

Weeping and Gnashing of Teeth...

Chubb & Son v. Superior Court, No. A140860 (D1d5 Aug. 12, 2014)

Plaintiff is an insurance defense lawyer. Although she was employed by a firm, essentially all of her legal work consisted of defending the insureds of Chubb, petitioner on this writ. She claims that after she took medical leave in connection with a pregnancy, her performance evaluations—which included commentary by Chubb and its insureds—inexplicably declined, ultimately leading to her termination. She sued both her firm and Chubb for employment discrimination.

Plaintiff requested her performance reviews and related documents in discovery. Chubb took the position that since plaintiff was privy to client communications within the documents, plaintiff herself could review them, but that she could not show them to her attorneys. Similarly, Chubb took the position that the privilege barred it from providing unredacted documents to its own litigation attorneys for their review. The trial court, relying on Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal. App. 4th 294 (2001), held that the attorney-client privilege did not preclude revealing the documents to the parties’ litigation attorneys. Chubb took a writ.
 
The first district denies the writ. It finds that Fox Searchlight controls. In that case, an in-house attorney sued Fox for pregnancy discrimination. (Sound familiar?) In the course of resolving an anti-SLAPP motion, the court held that it was permissible for the attorney to disclose her former client’s—the defendant’s—privileged communications to her own attorney for the purposes of evaluating an employment litigation. The facts at hand here are not meaningfully distinguishable. In reaching this result, the court rejects a number of hyperbolic arguments advanced by Chubb, including a claim that permitting attorneys embroiled in employment litigation to disclose privileged client information to their litigation counsel would “spell[ ] doom for the attorney-client relationship[.]”
 
Not so much.
 
Writ denied.

Workers' Comp. Court Can't Peek for Privilege

Regents of the Univ. of Cal. v. Workers’ Compensation Appeals Bd., No. G048217 (D3 June 17, 2014)

The court here holds that the provisions of the Evidence Code dealing with privilege apply in workers’ comp. appeals. Since § 915 prohibits a presiding officer from ordering the in camera production of materials to see if they are privileged, the WCAB erred in so ordering in this case.

Reversed.

Statutory Consent Requirement for HOA Gives Rise to Common Interest with Homeowners

Sehaus La Jolla Owners Association v. Superior Court, D064567 (D4d1 Mar. 12, 2014)

A homeowners’ association sued a developer over construction defects in common areas of a common interest development. While the board of the HOA was contemplating bringing the litigation, its attorneys met with the homeowners—some of whom would later bring claims arising from defects in their own units. It did so to inform them about it and obtain their majority’s consent to the litigation, as is required under Civil Code § 6150 and some regs governing HOAs. Over the HOA’s privilege objections, the developer sought discovery over what was said in these meetings. In a series of not-too-clear rulings, the trial court overruled the objections. The HOA sought mandamus. Unsurprisingly, the court of appeal grants the writ. Although prior cases establish that the attorney’s client is the HOA and its board and not the individual homeowners, given the requirement to inform and obtain consent from the homeowners, any discussions between the attorney and the homeowners were subject to attorney-client privilege, which was not waived due to the common interest doctrine.

Writ granted.