Wednesday, December 9, 2009
Wholesale Changes: Supreme Court Of California Disapproves Of Prior Precedent In Attorney-Client Ruling In Costco Appeal
California Evidence Code Section 954, California's attorney-client privilege, indicates in relevant part that
Subject to Section 912 and except as otherwise provided in this article, the client, whether or not a party, has a privilege to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer if the privilege is claimed by:
(a) The holder of the privilege;
(b) A person who is authorized to claim the privilege by the holder of the privilege; or
(c) The person who was the lawyer at the time of the confidential communication, but such person may not claim the privilege if there is no holder of the privilege in existence or if he is otherwise instructed by a person authorized to permit disclosure.
In June 2000, Costco Wholesale Corporation..., which operates warehouse-style retail establishments throughout California, retained the law firm of Sheppard, Mullin, Richter & Hampton to provide legal advice regarding whether certain Costco warehouse managers in California were exempt from California's wage and overtime laws. Attorney Kelly Hensley, an expert in wage and hour law, undertook the assignment, ultimately producing for Costco [a] 22-page opinion letter....The letter followed conversations held by Hensley with two warehouse managers Costco had made available to her. Costco, the managers, and Hensley understood the communications between the managers and Hensley were, and would remain, confidential. Similarly, Costco and Hensley understood that Hensley's opinion letter was, and would remain confidential.
In arguing in favor of the trial court's ruling, plaintiffs cite [precedent] for the proposition that despite the unequivocal language of Evidence Code Section 915 subdivision (a), the section's prohibition “is not absolute,” and a litigant might be required to reveal some information in camera to enable the court to determine whether a communication is subject to the attorney-client privilege. But in citing these cases, plaintiffs fail to recognize the critical distinction between holding a hearing to determine the validity of a claim of privilege and requiring disclosure at the hearing of the very communication claimed to be privileged. Evidence Code Section 915, while prohibiting examination of assertedly privileged information, does not prohibit disclosure or examination of other information to permit the court to evaluate the basis for the claim, such as whether the privilege is held by the party asserting it....Evidence Code Section 915 also does not prevent a court from reviewing the facts asserted as the basis for the privilege to determine, for example, whether the attorney-client relationship existed at the time the communication was made, whether the client intended the communication to be confidential, or whether the communication emanated from the client....Accordingly, while the prohibition of Evidence Code Section 915 is not absolute in the sense that a litigant may still have to reveal some information to permit the court to evaluate the basis for the claim of privilege...,it does not follow that courts are free to ignore the section's prohibition and demand in camera disclosure of the allegedly privileged information itself for this purpose.