Attorney-Client Privilege

Opinion Letters Are Privileged, Calif. High Court Rules

The California Supreme Court, in a unanimous opinion, ruled that factual information in letters from outside counsel to corporate counsel is just as privileged as legal advice.

“Although exercise of the privilege may occasionally result in the suppression of relevant evidence, the legislature of this state has determined that these concerns are outweighed by the importance of preserving confidentiality in the attorney-client relationship,” the court held (PDF).

The Recorder reports that the attorney-client privilege issue stems from a wage-and-hour dispute between Costco Wholesale Corp. and employees.

Costco hired Sheppard, Mullin, Richter & Hampton to advise them on the matter and partner Kelly Hensley wrote a 22-page opinion letter with legal advice and factual information on the matter. A group of department managers suing to recover overtime sought to have the letter produced.

“Think about what the world would be like if it had come out the other way,” Joel Benoliel, Costco’s senior vice president and chief legal officer told the Recorder. “I think that lawyers and clients in California dodged a bullet.”

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