Rico v. Mitsubishi Motors Corp.
42 Cal.4th 807, 68 Cal. Rptr. 3d 758, 171 P.3d 1092 (2007)
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Rule of Law:
An attorney who inadvertently receives materials that are obviously privileged or confidential must stop reading the materials as soon as the privilege is discovered, notify the sending attorney, and refrain from using the materials.
Facts:
- Attorneys for Mitsubishi, including James Yukevich, met with defense experts and a case manager, Jerome Rowley, to discuss litigation strategy for a vehicle rollover lawsuit.
- At Yukevich's direction, Rowley acted as a paralegal and took notes summarizing the key points of the six-hour strategy session.
- Yukevich later edited and annotated a single printed copy of these notes, which contained his mental impressions but were not labeled 'confidential' or 'work product.'
- During a deposition at the office of opposing counsel, Raymond Johnson, Yukevich left his case file containing the notes unattended in a conference room.
- Johnson came into possession of the notes, and he admitted that within a minute or two of review, he knew they were confidential defense materials not intended for him.
- Despite this knowledge, Johnson studied the document, made copies, shared it with his co-counsel and experts, and annotated it.
- A week later, Johnson used the contents of the privileged notes to question a defense expert, Geoffrey Germane, during a deposition.
Procedural Posture:
- Plaintiffs sued Mitsubishi Motors Corp. and others in a state trial court following a vehicle rollover accident.
- During discovery, Mitsubishi (defendant) filed a motion to disqualify the plaintiffs' attorneys and experts.
- The trial court conducted an evidentiary hearing and found that plaintiffs' counsel, Johnson, had inadvertently received and unethically used a privileged defense document.
- The trial court granted the motion, ordering the disqualification of plaintiffs' counsel and experts.
- Plaintiffs (appellants) appealed the disqualification order to the California Court of Appeal.
- The Court of Appeal affirmed the trial court's order.
- The California Supreme Court granted review.
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Issue:
Does an attorney who inadvertently receives a document that is clearly identifiable as opposing counsel's privileged work product have a duty to stop reading and immediately notify the sender, and is disqualification an appropriate remedy for counsel's failure to do so after studying and using the document to their client's advantage?
Opinions:
Majority - Corrigan, J.
Yes. An attorney who inadvertently receives a document that is obviously privileged has an ethical duty to stop reading and notify opposing counsel, and disqualification is an appropriate remedy when the attorney violates this duty and uses the material, causing irreparable prejudice. First, the document constituted absolute attorney work product because it was not a verbatim transcript but a summary reflecting the attorney's impressions, conclusions, and theories, which were inextricably intertwined with the recorded statements. Second, the court adopted the standard from State Comp. Ins. Fund v. WPS, Inc., which dictates that a lawyer receiving materials that appear privileged must refrain from examining them more than is essential to ascertain their privileged nature and must immediately notify the sender. Johnson violated this objective standard by scrutinizing, copying, disseminating, and using the notes after quickly realizing they were confidential. Finally, disqualification was not an abuse of discretion because Johnson's unethical use of the notes to undermine defense experts caused unmitigable and irreversible damage, and the 'bell cannot be unrung' through lesser remedies like in limine orders.
Analysis:
This decision solidifies the State Fund rule as the mandatory standard of conduct for California attorneys who inadvertently receive privileged materials, extending its application explicitly to attorney work product. It elevates professional ethics over a purely adversarial approach, making clear that an attorney cannot take advantage of an opponent's mistake. The ruling confirms that disqualification, while a drastic remedy, is appropriate when the misuse of privileged information creates a substantial and irreversible prejudice that taints the proceedings, setting a significant precedent for the consequences of such ethical breaches.
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