California Labor &
Employment Law Blog
Nov 30, 2009

California Supreme Court Sends Strong Message Protecting Attorney-Client Privilege

Topics: Court Decisions

Today the California Supreme Court issued its decision in Costco v. Superior Court (Randall), holding that a trial court erred by having an attorney-client privileged memorandum reviewed and redacted by a discovery referee, and then ordering portions of the memorandum produced to the other side. Specifically, Costco had retained legal counsel to provide advice regarding the proper exempt/non-exempt classification of its managerial employees for wage and hour purposes. Costco's outside legal counsel interviewed some managerial employees and prepared a memorandum to Costco, including information about those interviews and providing legal advice based thereon. Later, Costco was sued by some managers for alleged misclassification and wage and hour violations. The plaintiff in the case tried to obtain the memorandum in discovery from Costco. Costco objected based on attorney-client privilege and refused to produce the memorandum. The trial court ordered that Costco produce the memorandum for review by a discovery referee and the discovery referee ultimately determined that portions of the memorandum relating to a recitation of facts provided to the attorney by the manager employees were not privileged and should be produced.

On review by the California Supreme Court, the Court held that the trial court (1) should not have ordered the memorandum disclosed to a discovery referee in order to rule on the claim of privilege, and (2) the entire memorandum was privileged. More specifically, the Court indicated that Evidence Code section 915 prohibits a court from ordering in camera review of a privileged document for the purpose on determining whether the document is actually privileged. Furthermore, the court ruled that regardless of whether or not conversations between an attorney and a corporation's employees were themselves privileged, a legal memorandum between an attorney and client is privileged regardless of whether it includes potentially unprivileged information. The fact that certain information may ultimately be discoverable through other means does not translate to a finding that the same information is discoverable in the form of a legal memorandum from an attorney to the client.

The Supreme Court's decision in Costco is here.

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