July 2012 - The Perils of Protecting the Privilege
by Scott B. Garner
Sir Lancelot: We were in the nick of time. You were in great peril.
Sir Galahad: I don’t think I was.
Sir Lancelot: Yes, you were. You were in terrible peril.
Sir Galahad: Look, let me go back in there and face the peril.
Sir Lancelot: No, it’s too perilous.
Sir Galahad: Look, it’s my duty as a knight to sample as much peril as I can.
Sir Lancelot: No, we’ve got to find the Holy Grail. Come on.
Sir Galahad: Oh, let me have just a little bit of peril?
Sir Lancelot: No. It’s unhealthy.
~ Monty Python and the Holy Grail (1975).
Business and Professions Code § 6068(e)(1) requires an attorney “[t]o maintain inviolate the confidence, and at every peril to himself or herself to preserve the secrets, of his or her client.” But what exactly does “every peril” mean in this context? Are there perils that a lawyer need not endure before disclosing a client confidence?
One possible peril is that of contempt for disobeying a court order. Although courts obviously make every effort to respect a lawyer’s duty to maintain the confidences of his or her client, there may be situations where the court is asked to consider an issue that can only be determined by examining confidential information1. In such a case, a court may order a lawyer to turn over confidential or privileged documents, or to disclose confidential or privileged conversations—likely in camera.
The law is clear that a court may not inspect information in camera for the purpose of determining whether the information is privileged in the first instance. Evidence Code section 915(a) states that, with certain exceptions, “the presiding officer may not require disclosure of information claimed to be privileged . . . in order to rule on the claim of privilege.” The California Supreme Court has ruled similarly, specifically addressing in camera inspections: “Evidence Code section 915 prohibits a court from ordering in camera review of information claimed to be privileged in order to rule on the claim of privilege.” Costco Wholesale Corp. v. Super. Ct., 47 Cal. 4th 725, 739 (2009).
Other situations may not be as clear, however. For instance, where a party seeks production of an otherwise privileged communication on the ground that the privilege is subject to some exception (e.g., a waiver of the privilege), then Evidence Code section 915(a) and Costco arguably do not apply, as the existence of the privilege is not at issue. See Oxy Res. Cal. LLC v. Super. Ct., 115 Cal. App. 4th 874, 896 (2004) (“Courts have recognized, if necessary to determine whether an exception to the privilege applies, the court may conduct an in camera hearing notwithstanding section 915.”) (emphasis in original, internal citation and quotation omitted)2. In those instances, the court may order the in camera production of documents or other information at issue so that it can determine if an exception to the privilege applies. And, although it did not expressly find that privileged material could be disclosed in camera, the Supreme Court at least left open the possibility that circumstances might exist where such disclosure would be appropriate. See General Dynamics Corp. v. Super. Ct., 7 Cal. 4th 1164, 1191 (“The use of sealing and protective orders, limited admissibility of evidence, orders restricting the use of testimony in successive proceedings, and, where appropriate, in camera proceedings, are but some of a number of measures that might usefully be explored by the trial courts as circumstances warrant.”) (emphasis added). The General Dynamics court, however, declined to articulate what such circumstances might be.
Yet another instance where a court may want to review a privileged communication is when a lawyer files a motion to withdraw that is necessitated by some discussion with his or her client—for example, if the client threatens the lawyer with a malpractice complaint or says he will not pay a lawyer’s bill. The lawyer must then communicate to the court the need to withdraw without disclosing any confidential or privileged communications—including, for example, the actual threat that led to the need to withdraw. Typically, courts will accept a vague statement to the effect that “ethical obligations require withdrawal,” but some courts may require more information—particularly where they suspect something else may be going on. In some cases, courts have ordered a lawyer to disclose in camera the client communication that is at issue.
What must a lawyer do when she is ordered to disclose confidential client communications to the court under circumstances she does believe permits such disclosure? Must she refuse, even at the risk of contempt? Is that one of the “perils” that the legislature contemplated when enacting Business and Professions Code section 6068(e)(1)? There is very little authority to guide a lawyer facing this dilemma.
Cases addressing the issue of waiver in the context of a compelled disclosure—while not necessarily dispositive of the issue—provide some helpful language. One such case is Regents of University of California v. Superior Court, 165 Cal. App. 4th 672 (2008). In Regents, the court rejected a claim of waiver of the attorney-client privilege based on counsel’s disclosure to the Department of Justice, which the producing party argued was effectively compelled because it needed to demonstrate its cooperation with an investigation3. In a subsequent civil action against the corporation, a plaintiff sought production of attorney-client communications, arguing that the corporation’s prior disclosure to the government constituted a waiver of the privilege. In opposing production and the ensuing motion to compel, the corporation argued that its production to the government was coerced within the meaning of Evidence Code section 912(a) and, thus, did not constitute a waiver of the privilege. Id. at 677(4); Cal. Evid. Code § 912(a)(“The right of any person to claim a privilege provided by Section 954 (lawyer-client privilege) . . . is waived with respect to a communication protected by the privilege if any holder of the privilege, without coercion, has disclosed a significant part of the communication or has consented to disclosure made by anyone.” (emphasis added)). The court agreed with the corporation, holding, “No waiver of the privilege will occur if the holder of the privilege has taken reasonable steps under the circumstances to prevent disclosure. The law does not require that the holder of the privilege take ‘strenuous or Herculean efforts’ to resist disclosure.” Id. at 683 (citation omitted); see also Schlumberger Ltd. v. Super. Ct., 115 Cal. App. 3d 386, 391-92 (1981) (“Disclosure pursuant to a court order is coerced and does not constitute a waiver”); see also Cal. Evid. Code § 914 (“No person may be held in contempt for failure to disclose information claimed to be privileged unless he has failed to comply with an order of a court that he disclose such information”) (emphasis added).
Regents and the cases it cites address the issue of compelled disclosure in the context of deciding whether that disclosure constitutes a waiver of the privilege, and not in the context of whether a lawyer must comply with a court’s order compelling disclosure. There is at least one case that expressly addresses the contempt issue, but that 60-year-old case discusses it only in a concurring opinion. See People v. Kor, 129 Cal. App. 2d 436, 447 (1954) (J. Shinn concurring) (“Defendant’s attorney should have chosen to go to jail and take his chances of release by a higher court,” rather than disclose privileged information). There does not seem to be any more direct authority on this issue.
What, then, should a lawyer do if ordered to produce a privileged document to the court for inspection? The prudent course would be to make as many Herculean efforts as possible to avoid the coerced production, without having to tell the court, “No.” First, ask your client to consent to an in camera inspection, pursuant to Rule 3-100(A), advising him that such disclosure in the face of an order is unlikely to constitute a waiver of the privilege. Second, if the client will not consent, and the court will not change its mind, consider asking the court to stay its order while you file a writ. If this, too, fails, then at least you will have made significant efforts to avoid disclosure without disobeying the court. Whether you ultimately must take your toothbrush and your client’s secret to jail, rather than disclosing it, is an open question. Based on Regents and similar “waiver” cases, there is a good argument that “every peril” does not include going to jail for contempt, and that a lawyer in that situation may comply with the court’s order and disclose the confidential communication in camera. Still, there is no guarantee that this course of action will be without peril.
- The client’s confidences, of course, go beyond just attorney-client privileged communications, extending to any information that the client would not want to become public. Evidence Code section 952 defines a “confidential communication” as “information transmitted between a client and his or her lawyer in the course of that relationship and in confidence . . . .” Information can be “confidential” even if it is not “privileged.” See Goldstein v. Lees, 46 Cal. App. 3d 614, 621 n.5 (1975) (“The attorney-client privilege is more limited than the ethical obligation of a lawyer to guard the confidences and secrets of his client.”) (citations omitted); Cal. Formal Opn. 1986-87.
- Where production is sought on the ground that an otherwise privileged document is subject to the crime-fraud exception, the law is even murkier. Evidence Code section 956 provides that a document subject to the crime-fraud exception is not privileged in the first instance. Thus, the crime-fraud exception is not an exception at all, and an in camera review would be prohibited by Evidence Code section 915(a) and Costco for the purposes of determining whether a privilege exists in the first instance. Oxy’s contrary rule would not appear to apply. That said, courts routinely treat the crime-fraud exception as just that—an exception. If so treated, then Oxy, and not Costco, would appear to apply.
- As the court explained:
- At the time the federal agencies obtained the privileged communications from defendants, the DOJ had adopted a policy under which, in determining whether it would indict a corporation, the department would consider the corporation’s cooperation with the government. Under the department’s policy, one important indicia of a corporation’s cooperation was the corporation’s willingness to waive the attorney-client . . . privilege [ ] when responding to the government’s subpoenas and requests for documents.
- Id. at 676.
- In its analysis, Regents discusses a number of other cases—both in and out of California—recognizing situations where the disclosure of attorney-client privileged communications is deemed to have been compelled and, thus, does not constitute a waiver. See, e.g., Transamerica Computer v. Intern. Business Machines, 573 F.2d 646, 650-52 (9th Cir. 1978) (finding that inadvertent production in the face of an accelerated discovery order did not lead to waiver); O’Mary v. Mitsubishi Electronics Am., Inc., 59 Cal. App. 4th 563, 577 (1997) (finding inadvertent production did not constitute a waiver of the attorney-client privilege). In one of the cases discussed in Regents, Duplan Corporation v. Seering Milliken, Inc., 397 F. Supp. 1146 (D.S.C. 1975), the court held that the party did not waive the privilege when it turned over documents to the court for an in camera inspection “upon the suggestion of the court.” Id. at 1163.
Scott B. Garner is a partner at Morgan, Lewis & Bockius LLP, and the chair of its Irvine Litigation Group. His practice focuses on complex business litigation, with an emphasis on attorney liability defense and securities litigation. Garner is co-chair of the OCBA Professionalism and Ethics Committee, and a member of the California State Bar’s Committee on Professional Responsibility and Conduct. He may be contacted at firstname.lastname@example.org.