Costco Wholesale Corp. v. Superior Court
219 P.3d 736, 47 Cal. 4th 725, 101 Cal. Rptr. 3d 758 (2009)
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Rule of Law:
A confidential communication between an attorney and client is protected in its entirety by the attorney-client privilege, regardless of whether it contains factual material. A court is statutorily prohibited by California Evidence Code § 915(a) from compelling the in camera disclosure of a communication claimed to be privileged in order to rule on the validity of that privilege claim.
Facts:
- In 2000, Costco Wholesale Corporation retained attorney Kelly Hensley of an outside law firm to provide a legal opinion on whether certain warehouse managers were correctly classified as exempt from overtime wage laws.
- Hensley interviewed two Costco warehouse managers to gather information, with the understanding that these communications would remain confidential.
- Following her investigation and legal analysis, Hensley produced a 22-page confidential opinion letter for her client, Costco.
- Several years later, a group of Costco employees filed a class-action lawsuit against Costco, alleging they were misclassified as exempt and were owed overtime pay.
- During the litigation, the employee plaintiffs sought to compel discovery of Hensley's 22-page opinion letter.
- Costco objected to producing the letter, asserting it was protected by the attorney-client privilege and the attorney work product doctrine.
Procedural Posture:
- Costco employees filed a class-action lawsuit against Costco Wholesale Corporation in a California superior court (trial court).
- During discovery, the plaintiffs filed a motion to compel production of a legal opinion letter.
- The trial court ordered a discovery referee to conduct an in camera review of the letter to assess Costco's claim of privilege.
- The referee submitted a heavily redacted version of the letter, and the trial court adopted the referee's findings, ordering Costco to produce the redacted letter.
- Costco petitioned the California Court of Appeal (an intermediate appellate court) for a writ of mandate to overturn the trial court's order.
- The Court of Appeal denied Costco's petition.
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Issue:
Does a court violate the attorney-client privilege and Evidence Code § 915(a) by ordering an in camera review of a confidential attorney-client communication to determine which portions are privileged, and then ordering disclosure of the portions it deems factual?
Opinions:
Majority - Werdegar, J.
Yes. A court violates the attorney-client privilege and Evidence Code § 915(a) by ordering such a review and disclosure. The attorney-client privilege is absolute and protects the entire confidential communication between an attorney and client, not just the legal advice contained within it. The privilege covers the transmission of information, meaning that even factual material included in a confidential legal opinion is protected because its inclusion can reveal legal strategy. Furthermore, Evidence Code § 915(a) creates a clear prohibition against a court requiring the disclosure of information claimed to be privileged in order to rule on that claim. The primary harm from a wrongful disclosure order is not that the opposing party gains discoverable facts, but that the confidential relationship between attorney and client is disrupted, which is sufficient harm to warrant extraordinary relief.
Concurring - George, C. J.
Yes. The concurring opinion agrees fully with the majority's conclusion but writes separately to emphasize that the purpose of the communication itself is critical to the application of the privilege. To be privileged, a communication must occur 'in the course of' the attorney-client relationship, meaning it must be made for the purpose of seeking or providing legal service or advice. The opinion clarifies that if an attorney is also acting in a non-legal capacity, such as a business agent, communications made for that purpose would not be protected by the privilege. The focus should be not only on the existence of an attorney-client relationship but also on the specific purpose of the communication in question.
Analysis:
This decision solidifies the absolute nature of the attorney-client privilege in California, establishing a bright-line rule against courts conducting in camera reviews of contested communications to determine the privilege's applicability. By protecting the entire communication rather than allowing judicial parsing of 'fact' from 'advice,' the court reinforces the policy of encouraging full and open discussion between attorneys and clients. The ruling disapproves of prior appellate decisions that had permitted such review, thereby resolving a conflict and providing greater certainty to practitioners that confidential legal communications will not be forcibly disclosed to a judge for the purpose of ruling on the privilege itself.
