by Howard J. Klein
An increasingly common situation in litigation is the acquisition, often (but not always) inadvertent, of documents in which an adverse party claims a privilege. The recent case of Clark v. Superior Court of San Diego County, 2011 Cal. App. LEXIS 680 (2011), explains the duties of counsel acquiring such documents, and the consequences (disqualification) of violating those duties.
Clark retained Higgs as legal counsel in an action against VeriSign (Clark’s former employer). VeriSign determined that Clark was in possession of documents in which VeriSign claimed the attorney-client privilege. Higgs refused VeriSign’s demands to return the privileged documents to VeriSign. Clark thereafter admitted that the privileged documents were used in support of his claims against VeriSign. VeriSign then moved to disqualify Higgs, arguing that Clark and Higgs “had improperly obtained, retained, reviewed and used privileged documents and had obtained an improper advantage from that conduct,” contrary to the ethical obligations required by the California Supreme Court in Rico v. Mitsubishi Motors Corp., 42 Cal.4th 807 (2009 (“Rico”), and State Comp. Ins. Fund v. WPS, Inc., 70 Cal.App.4th 644 (1999) (“State Fund”); 2011 Cal.App. LEXIS 680, *7–*8.
Limited Review to Determine Privilege
The court granted the motion to disqualify Higgs. The trial court found that Higgs had violated the duties mandated by Rico and State Fund to review the documents only to the extent reasonably necessary to determine that they were privileged, and, once the documents were determined to be privileged, to notify VeriSign’s counsel that Higgs was in possession of the documents. 2011 Cal.App. LEXIS 680, *9. The trial court explained that a disqualification motion “requires resolution of the tension between the client’s right to choose his or her counsel and the need to maintain ethical standards,” and that in ruling on the motion, “the paramount concern must be to preserve the public trust in the scrupulous administration of justice,” which requires the protection of the attorney-client privilege. Id. at *10. The disqualification of Higgs was necessary, the court ruled, “to protect VeriSign’s rights as well as the integrity of the judicial proceedings.” Id.
Clark filed a petition with the Court of Appeal for a writ of mandate directing the Superior Court to vacate its ruling. The writ was denied.
The Court first recited the same considerations for considering a disqualification motion as those cited by the trial court, 2011 Cal.App. LEXIS 680 at *14–*15, citing State Fund, supra, and Rico, supra, in holding that an attorney receiving “materials that obviously appear to be . . . confidential and privileged,” is obligated to “refrain from examining the materials any more than is essential to ascertain if the materials are privileged,” and to “immediately notify the sender” that the receiving attorney possesses the materials. 2011 Cal.App. LEXIS 680, *16.
Citing Costco Wholesale Corp. v. Superior Court, 47 Cal.4th 725 (2009), the Court then explained that “the party claiming the attorney-client privilege has the burden of establishing the preliminary facts necessary to support its exercise, i.e., a communication made in the course of an attorney-client relationship.” 2011 Cal.App. LEXIS 680 at *18–*19. Once these facts have been established, the party opposing the claim has the burden of proving that the communication was not confidential. Id. at *19.
In Camera Review Unnecessary
Clark’s petition contended that an in camera review of VeriSign’s documents was a prerequisite to determining whether the documents were privileged, because it was necessary to ascertain whether the “dominant purpose” of each document was to serve the attorney’s work as an attorney, or to serve some other, non-legal (e.g., business) purpose. 2011 Cal.App. LEXIS 680 at *19–*20 (2011). The Court disagreed, and, quoting Costco, supra, stated, “because the privilege protects a transmission irrespective of its content, there should be no need to examine the content in order to rule on a claim of privilege.” Id. at *21. (Emphasis in the original.) Thus, the Court ruled, “to determine whether a communication is privileged, the focus of the inquiry is the dominant purpose of the relationship between the parties to the communication.” Id. at *24. (Emphasis added.) Accordingly, once it is shown that the dominant purpose of the relationship was that of attorney-client, the privilege applies to communications between the attorney and the client. Id.
Concluding that VeriSign had established the requisite attorney-client relationship, the Court upheld the application of the privilege to VeriSign’s documents. Evidence that Higgs reviewed the contents of the documents to determine whether their “dominant purpose was business or legal advice” was sufficient to show a breach of the duty to limit review of the documents only to the extent necessary to determine that they were transmitted between VeriSign and its counsel. 2011 Cal.App. LEXIS 680 at *29 (2011). Agreeing with the trial court that Higgs had violated the duties required by Rico and State Fund, supra, the Court of Appeal upheld the disqualification order.
Thus, an attorney receiving a document that appears to be privileged has the duty to review it only to the extent necessary to determine that it is an attorney-client communication. Once that determination is made, the receiving attorney may not review the contents of the document any further, but must immediately inform the sending attorney of the receiving attorney’s possession of the document. Failure to comply with this procedure will likely result in the disqualification of the receiving attorney.