May 2011 - You Can’t Take it With You ... or Can You?
by Jennifer R. Bagosy
Your client leaves you. You leave your client. You switch law firms and your client stays with your former firm. In each of these situations, you have certain obligations to your client under the California Rules of Professional Conduct. For example, under Rule 3-700(A)-(C), unless an exception applies, you cannot simply “leave” your client without receiving permission from the court. Moreover, whether or not permission is required, you must take “reasonable steps to avoid reasonably foreseeable prejudice to the client.” You must also “promptly release to the client, at the request of the client, all the client papers and property.” Rule 3-700(D). But does “all” really mean all? It sounds simple in principle, but courts and state bar associations have struggled with this question, particularly where it pertains to attorney work product.
Consider these hypotheticals: 1) Attorney Amanda just withdrew from representing a client who always said exactly what was on his mind. Despite Amanda’s best efforts to tone down her client’s language and demeanor, the client was hostile and abrasive during his deposition. Amanda wrote a memo to the file harshly critiquing her client’s deposition style, adding several of her own expletives to the ones she attributed to him. Now she must decide whether Rule 3-700(D) requires her to turn over that memo to the client; 2) Attorney Boris was a junior partner at a law firm who represented Mom & Pop, LLC. He accepted an offer to join another firm, but could not take Mom & Pop’s business with him. Mom & Pop requested that Boris return the client files. Just before accepting the new firm’s offer, Boris had prepared a rough draft of a summary judgment motion that was not due for another three months. He was not proud of the state of this draft, but had no time to revise it before his start date. Must he provide the draft to Mom & Pop?
California law provides no firm answer—or even a clear set of guidelines—regarding who would get the documents in these situations. As a result, equitable considerations and the motives of the parties seeking the documents often determine the outcome.
Under California Civil Procedure Code §2018.30: “A writing that reflects an attorney’s impressions, conclusions, opinions, or legal research or theories is not discoverable under any circumstances.” This absolute rule protecting attorney work product directly conflicts with Rule 3-700’s requirement that “all the client papers and property” must be returned upon termination of representation.
California federal and state courts have never resolved this conflict. “California has two conflicting absolutes, the absolute right of a client to his attorney’s work product, and the absolute right of an attorney to protect his or her impressions, conclusions, opinions, and legal research or theories from disclosure.” Metro-Goldwyn-Mayer, Inc. v. Super. Ct., 25 Cal.App.4th 242, 248 (1994) (citing Roberts v. Heim, 123 F.R.D. 614, 634 (N.D.Cal. 1988). The MGM court—which is still frequently cited as a leading authority—acknowledged two lines of prior cases, the first of which held that the work product belonged to the client, and the second of which focused on the attorney’s right to withhold work product documents. Id. at 247.
After identifying these two divergent schools of thought, MGM then avoided the question entirely by ruling on equitable grounds. In MGM, a law firm represented MGM and its majority shareholders (including Tracinda Corporation and several individuals) in arranging a merger. Later, MGM, represented by a different firm, sued Tracinda and the individuals for “engineer[ing] the merger by means of fraud and deception for their own financial benefit.” Id. at 244–45. The bank that funded the merger also sued the same defendants in an action arising from the same facts as the MGM-Tracinda litigation. The law firm that originally represented MGM in the merger now represented the Tracinda defendants against the bank, and had provided the Tracinda defendants with its attorney work product arising from the merger. MGM sought access to that work product as the firm’s former client. The MGM court found a simple basis on which to rule in MGM’s favor: “Equity demands that either both parties should have the information or neither should.” Id. at 248–49.
Later cases followed MGM’s lead by avoiding the conflict between work product and return of client property and ruling on equitable grounds. In Eddy v. Fields, 121 Cal.App.4th 1543 (2004), a trustee sued the prior trustees’ two (unassociated) lawyers for inappropriate billing and fees, and sought return of the client file from Attorney 1, which included some of Attorney 2’s work product. The court declined to decide whether Rule 3-700(D) trumps §2018.30, and instead held that Attorney 2 waived work product protection by sharing the core work product with Attorney 1. In the court’s words: “Equity demands waiver of the privilege under the circumstances.” Id. at 1550.
Another court reached the opposite result in the class action case of White v. Experian Information Solutions, Inc., No. SACV 05-1070 DOC, 2009 U.S.Dist. LEXIS 117979 (C.D.Cal. 2009). A sub-group of class plaintiffs objected to the settlement proposed by lead counsel, and they also objected to the lead plaintiff and class counsel’s fitness to continue as such. The court ordered that lead counsel withdraw, and the objecting plaintiffs requested that the former lead counsel return to them all “client papers”—including work product—under Rule 3-700(D). Id. at *15. The court concluded that work product was properly excluded from the client file because the objecting plaintiffs failed to show foreseeable prejudice or that the work product was reasonably necessary to their case. Id. at *23.
Local California bar associations are likewise conflicted. The Los Angeles County Bar Association has taken the firm position that “‘work product’ for which the client may be billed, belongs to the client,” and that “in most cases, virtually everything in a client’s file is the property of the client, because it either has been copied at client expense, or the time utilized to create it has been at client expense.” LACBA Formal Opinion Nos. 330 (1972), 362 (1976), and 405 (1982), cited in White, 2009 U.S. Dist. LEXIS 117979, at *22. The San Diego County Bar Association took the opposite view, finding that an attorney’s personal notes, “impressions, conclusions, opinions or legal theories” are the property of the attorney and are not part of the file to be returned to the client. Opinion No. 1984–3. Such attorney notes are “typically characterized by their informality, candor, disjuncture, or semiliterate prose, . . .” These are an attorney’s “tools of [the] trade, likened to the tools of a carpenter, without which the attorney cannot construct the appropriate legal representation. . . .” Opinions No. 1977-3.
Meanwhile, the Bar Association of San Francisco advocated a more nuanced approach in its Opinion 1990–1, which would require an attorney to return work product under Rule 3–700 if it “reasonably foreseeably prejudices the client’s representation.”
In light of these divergent authorities, what should Attorney Amanda and Attorney Boris do, short of hoping that equity will be on their side? If the Los Angeles approach is adopted, all work product that is billed to the client belongs to the client. Thus, Boris would likely have to send his draft to Mom & Pop, LLC, but Amanda might be able to make the argument—if she prepared the critique of her client on her own time—that she need not return it.
Under the White/San Francisco approach, both attorneys should consider whether there will be prejudice to the client if they do not provide the documents. In Boris’ case, although the brief is not due for three months, if his draft summary judgment motion contained some insight into the arguments to be made on summary judgment, or compiled a number of critical excerpts from depositions or documents, failure to return the draft could cause prejudice to Mom & Pop because they would have to pay their new attorney to re-do that work. In Amanda’s case, she might have to consider whether depriving her client’s counsel of her caustic analysis of his abilities as a witness would prejudice the client.
However, an ounce of prevention would have helped both Amanda and Boris avoid this situation in the first place. Amanda could have taken greater care in writing her memo to allow her client’s language to speak for itself without adding her own four-letter words. Boris could take the time to clean up his draft motion as best he can before he makes his transition—at the very least, a quick spelling and grammar check, combined with a cover email emphasizing the preliminary nature of the draft, should help to ease his mind regarding his former clients’ perception of his abilities. Because there is no clear rule, attorneys should assume that their work product may someday end up in the hands of their client—and should take care to exercise professionalism and decorum in their internal drafts and memoranda.
Jennifer R. Bagosy is an associate at Morgan, Lewis & Bockius LLP. Her practice focuses on commercial litigation at the trial and appellate levels, with experience in securities, professional liability, and bank failure-related litigation. Bagosy is the Secretary of the OCBA Professionalism & Ethics Committee. Her email address is email@example.com.