On Legal Ethics

Inadvertent disclosure involves the competing interests of the duty of loyalty and diligent representation of a client against the duty of fairness and duty to maintain an even playing field. This month we will continue our discussion of the guidance given by the California Supreme court in Rico v. Mitsubishi Motors.

Rico v. Mitsubishi Motors

As discussed last month, in Rico v. Mitsubishi Motors, (2007) 42 Cal.4th 807, the California Supreme Court considered what actions are ethically required of a lawyer who inadvertently receives privileged documents. The Court adopted the rule expressed in State Compensation Insurance Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644 (hereafter State Fund), that the attorney may only read as much as is necessary in order to determine the documents are privileged. Once that is determined, the attorney must notify the sender immediately and make an effort to resolve the situation.

Reiterating the holding in Rico, the Court adopted the State Fund standard: "When a lawyer who receives materials that obviously appear to be subject to an attorney-client privilege or otherwise clearly appear to be confidential and privileged and where it is reasonably apparent that the materials were provided or made available through inadvertence, the lawyer receiving such materials should refrain from examining the materials any more than is essential to ascertain if the materials are privileged, and shall immediately notify the sender that he or she possesses material that appears to be privileged. The parties may then proceed to resolve the situation by agreement or may resort to the court for guidance with the benefit of protective orders and other judicial intervention as may be justified." Id. at 817 (citing State Fund, supra, 70 Cal.App.4th at 656-57).

Work product

One factor distinguishing the documents in Rico from other cases was the nature of the information contained therein. The California Supreme Court began its analysis by recognizing the document as protected attorney work product. Id. at 814. The Court cited various authorities defining attorney work product including a definition protecting writings containing an "attorney's impressions, conclusions, opinions, or legal research or theories." Id. (citing California code of civil Procedure Section 2018.030(a); Wellpoint Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, 120). Attorney Yukevich's document, which was inadvertently produced, contained a summary of the experts' statements in addition to his own comments and personal impressions; the document was therefore protected work product. Id. at 815.

The Court pointed out that the protected nature of the document at issue precluded its use for any reason. Id. at 820. This would include using it for impeachment, as Johnson (the lawyer who inadvertently received the information) attempted to do. And regarding plaintiff's argument that the material in question should be discoverable under the crime or fraud exception, the Court reiterated that under California Code of Civil Procedure (Cal. CCP) Section 2018.030(a), "[a] writing that reflects an attorney's impressions, conclusions, opinions or legal research or theories is not discoverable under any circumstances," and also noted that Cal. CCP Section 2018.050 does not apply, as it deals with official law enforcement investigations or actions brought by a public prosecutor if a lawyer's services were obtained in order to "enable or aid anyone to commit...a crime of fraud." Id. The material at issue in Rico thus remained privileged and protected.

Given that this standard articulated in Rico could conceivably be subject to abuse, who makes the determination of how much an attorney who inadvertently receives privileged material from opposing counsel can read? The Rico Court noted that the State Fund standard is objective. Courts must consider if "reasonably competent counsel" under all of the facts and circumstances present in any individual case would conclude the documents at issue were privileged, and what extent of review would have been necessary to reach that conclusion. Id. at 818.

The Rico Court recognized this rule as consistent with the state policy to preserve the rights of attorneys to thoroughly investigate all aspects of their case, and practical enough to address the modern reality of the often massive nature of document production. Id. at 817-18. The Court also recognized that "(a)n attorney has an obligation not only to protect his client's interests but also to respect the legitimate interests of fellow members of the bar, the judiciary, and the administration of justice." Id. at 818 (citing Kirsch v. Duryea (1978) 21 Cal.3d 303, 309). The Court further held disqualification of plaintiffs' legal team to be proper due to the irreversible prejudice caused by Johnson's unethical use of the notes. Id. at 819.

Note that the Rico plaintiff argued that the inadvertently disclosed material in question should be discoverable under the crime/ fraud exception. The Rico Court reiterated that under California Code of Civil Procedure (Cal. CCP) Section 2018.030(a), "[a] writing that reflects an attorney's impressions, conclusions, opinions, or legal research or theories is not discoverable under any circumstances," and also noted that Cal. CCP Section 2018.050 does not apply, as it deals with official law enforcement investigations or actions brought by a public prosecutor if a lawyer's services were obtained in order to "enable or aid anyone to commit...a crime of fraud." Rico, supra, 42 Cal.4th at 818. The material at issue in Rico thus remained privileged and protected.

Please tune in next month for a continuing discussion of some of the issues raised by Rico, and some proposed solutions.