Resist Temptation: Reviewing Privileged Documents You Are Not Supposed to Have
In our electronic era, movement of large amounts of information over digital channels results in an increased risk that privileged information from a client will find its way into the hands of opposing counsel. The risk itself is not new, but the sheer volume and speed of modern business operations increase the potential of the inadvertent transfer of confidential and privileged information.
What does an attorney do after receiving privileged information without its owner’s consent? While the underlying legal rationale has varied over the years, the modern rule—that an attorney may not review or use that privileged information with impunity—has remained steady. In State Compensation Insurance Fund v. WPS, Inc.,2 the court held that an attorney who receives materials that obviously appear to be subject to the attorney-client privilege, and where it is reasonably apparent that the materials were transmitted inadvertently, should 1) refrain from examining the materials more than necessary to ascertain the materials are privileged, and 2) immediately notify the sender that the attorney possesses materials that appear to be privileged.3 Thereafter, the parties may proceed to resolve the situation by agreement or seek court guidance.4
In 2007, the court in Rico v. Mitsubushi Motors Corporation5 extended this rule to materials protected by the attorney work product doctrine in affirming a disqualification order, even though the notes at issue were not marked “confidential” or “work product.”6 “An attorney has an obligation not only to protect his or her client’s interests but also to respect the legitimate interests of fellow members of the bar, the judiciary, and the administration of justice.”7 Finding that a notation of confidentiality did not make a document more or less privileged, it interpreted the State Fund rule to be objective: “In applying the rule, courts must consider whether reasonably competent counsel, knowing the circumstances of litigation, would have concluded the materials were privileged, how much review was reasonably necessary to draw that conclusion, and when counsel’s examination should have ended.”8 Once a court determines that the document is privileged, the court does not review the documents further. “Courts do not make exceptions based on the content of the writing.”9
Lest anyone doubt the endurance of these rules, the California Court of Appeal recently applied them in approving a disqualification order where there was no obvious inadvertent transmission of the privileged information, but a former attorney employee inappropriately retained possession of documents subject to a nondisclosure agreement after his termination. In Clark v. Superior Court,10 attorney Clark was formerly employed with VeriSign, where he had signed a nondisclosure agreement. After his position was eliminated and he took with him privileged and confidential VeriSign documents, Clark sued VeriSign. Clark was represented by the Higgs law firm. A dispute arose over Clark’s possession and use of VeriSign’s privileged communications. Despite a lengthy meet and confer, Higgs neither returned nor destroyed the disputed documents. After Clark admitted in a deposition that he had and was using privileged documents in support of his claims, VeriSign successfully moved to disqualify Higgs.
The court of appeal denied Clark’s Petition for Writ of Mandate, rejecting Clark’s argument that an in camera review of documents was a prerequisite to determining whether documents were in fact privileged. “[W]hen the party claiming the privilege shows the dominant purpose of the relationship between the parties to the communication was one of attorney-client, the communication is protected by the privilege.”11 Because the focus in analyzing the “dominant purpose” is on the relationship between the sender and recipient, further review of the content of the communication is prohibited.12 Higgs was obligated not to review the VeriSign documents more than reasonably necessary to make the determination that they were sent between VeriSign and its counsel. Higgs was then required to notify VeriSign’s counsel.13 Because Higgs exceeded the permissible scope of review even after repeated warnings from VeriSign’s counsel, and because Higgs did not immediately notify VeriSign of his possession,14 it was not an abuse of discretion to disqualify Higgs. In doing so, the court rejected Clark’s contention that Higgs complied with its obligations because it obtained the documents properly from Clark, did not hide its possession of them, met and conferred with VeriSign, and sequestered the documents.15 Because of the danger of prejudice to VeriSign and to the integrity of the judicial process, and because disqualification is proper as a prophylactic measure to prevent future prejudice, no affirmative showing of existing injury from the misuse of privileged documents was required, and disqualification was not an abuse of discretion.16
The lessons of these cases are clear. Stop reading as soon as you have any reason to believe a document you have received in litigation constitutes communication between another attorney and the attorney's client—and is in your possession without their consent. Then notify the other counsel. Since the answer to the question of what is “permissible viewing” to determine dominant purpose is yet undefined, attorneys are well advised to keep review to a minimum. Attempts to stretch the timeline of permissible review can result in severe prejudice to your client in the loss of your services through disqualification, plus the loss of the client’s ability to use any of your work on the case up to that point—not to mention the potential ethical and disciplinary implications to you and potential harm to your professional reputation. Whatever value that forbidden piece of evidence might have had for your case, it is simply not worth the consequences that may flow.
1 People ex rel. Dep't. of Corps. v. SpeeDee Oil Change Systems, Inc., 20 Cal. 4th 1135, 1143-44 (1999).