Costco Wholesale Corp. v. Superior Court

In this case we consider whether the trial court erred by directing a referee to conduct an in camera review of an opinion letter sent by outside counsel to a corporate client, allowing the referee to redact the letter to conceal that portion the referee believed to be privileged, and ordering the client to disclose the remainder to the opposing party. We conclude the court’s directions and order violated the attorney-client privilege, and violated as well the statutory prohibition against requiring disclosure of information claimed to be subject to the attorney-client privilege in order to rule on a claim of privilege. (Evid. Code, § 915, subd. (a).)

BACKGROUND

In June 2000, Costco Wholesale Corporation (Costco), which operates warehouse-style retail establishments throughout California, retained the law firm of Sheppard, Mullin, Richter & Hampton to provide legal advice regarding whether certain Costco warehouse managers in California were exempt from California’s wage and overtime laws. 1 Attorney Kelly Hensley, an expert in wage and hour law, undertook the assignment, ultimately producing for Costco the 22-page opinion letter at issue here. The letter followed…

Concurring. — I agree with the majority that the lengthy opinion letter sent by outside counsel to corporate counsel, containing both factual recitations and legal advice, is protected by the attorney-client privilege. I also agree that the trial court erred in requiring disclosure of the letter for the purpose of ruling on petitioner’s claim of privilege, and that the Court of Appeal erred in declining to grant extraordinary relief on the ground that disclosure of the letter in redacted form did not harm petitioner.

*742 Although I also agree with the majority that “[t]he attorney-client privilege attaches to a confidential communication between the attorney and the client” (maj. opn., ante, at p. 734), in order to clarify the elements of the privilege I believe it bears emphasis that to be privileged, the communication also must occur “in the course of’ the attorney-client relationship (Evid. Code, § 952)— that is, the communication must have been made for the purpose of the legal representation. 1 In its application of the privilege to the present case, the majority emphasizes the purpose of the relationship between the attorney and the client. (See maj. opn., ante, at pp.…