CA Supreme Court Upholds Attorney-Client Privilege

Costco hired a law firm to advise the company regarding the classification of certain managers as exempt. The lawyer interviewed two of the managers to analyze their duties and responsibilities. She then produced a 22-page report. The report was considered confidential and privileged from the start.

Later, Costco was the subject of a wage and hour class action regarding the alleged mis-classification of the managers. The plaintiffs sought disclosure of the opinion letter. Costco objected, asserting attorney-client privilege.

Lower courts held that portions of the letter, containing factual information rather than attorneys' advice or opinions, should be disclosed. The California Supreme Court accepted the case for review and reversed.

The court flatly rejected any attempt to "parse" the letter:

We hold the attorney-client privilege attaches to Hensley’s opinion letter in its entirety, irrespective of the letter’s content. Further, Evidence Code section 915 prohibits disclosure of the information claimed to be privileged as a confidential communication between attorney and client “in order to rule on the claim of privilege.” (Id., subd. (a).) Finally, contrary to the Court of Appeal’s holding, a party seeking extraordinary relief from a discovery order that wrongfully invades the attorney-client relationship need not also establish that its case will be harmed by disclosure of the evidence.

Without deciding whether the communications between the managers and lawyer during the wage and hour audit were privileged, the court held that the lawyer's discussion with Costco concerning the managers' interviews were still privileged:
In sum, if, as plaintiffs contend, the factual material referred to or summarized in Hensley’s opinion letter is itself unprivileged it may be discoverable by some other means, but plaintiffs may not obtain it by compelling disclosure of the letter.

This obviously is an important decision for employers seeking advice from lawyers without fear of having that advice disclosed in later discovery.

The case is Costco Wholesale Corp. v. Superior Court and the opinion is here.