July 2012 Vol. 9, No. 2


Rule 4-100: Retention of Client Records


Cruz v. Dollar Tree Stores, Inc. (N.D.Cal. 2012) 2012 WL 1745539


Is an attorney ethically obligated to his client to retain, after termination of litigation, opposing party’s confidential information produced in discovery where a protective order expressly required the parties to return or destroy each other’s confidential information at the conclusion of the litigation?


No.  Under Rule of Professional Conduct 4-100(B)(3), an attorney is required to maintain for at least five years after the conclusion of a litigation a complete record of all “funds, securities, and other properties of a client” of which the attorney takes possession.  The Court rejected plaintiffs’ counsel’s contention that the term “other properties” included all client files as well as confidential documents produced by an opposing party in discovery. 

Attorney work product may be considered part of the client’s file and therefore the client’s property.  (2012 WL 1745539, *1, citing Ramirez v. Fuselier (B.A.P. 9th Cir. 1995) 183 B.R. 583, 587; White v. Experian Information Solutions Inc. (C.D.Cal. 2009) 2009 U.S.Dist. LEXIS 117979.) .)  That does not mean, however, that Rule 4-100 may be used to justify retention of another party’s confidential information as part of the client’s file.  “. . . Rule 4-100 deals primarily with preserving the identity of funds and other property held in trust for a client.  While the scope of a client’s property under Rule 4-100 may have been expanded to include attorney work product, the Court is aware of no authority which has further broadened the rule so as to encompass the confidential information disclosed by an opposing party through discovery.  Indeed, it strains credulity to suggest that another party’s confidential materials become the property of a client when they are produced in discovery pursuant to a protective order.  Further, reading 4-100 so broadly would hamper the private resolution of discovery disputes.  Parties might be unwilling to stipulate to protective orders or otherwise disclose confidential documents if they know that these documents could be retained by opposing counsel indefinitely.”  (2012 WL 1745539, *1, citation omitted.)

The Court found further support for its holding in Rule 3-700(D), which requires an attorney, “[s]ubject to any protective order or non-disclosure agreement,” to “release to the client . . . all client papers and property” upon termination of the attorney’s employment.  “[I]t would be unreasonable to interpret Rule 4-100 to mean that an attorney is obligated to retain for the client confidential material subject to a protective order when Rule 3-700(D) states that a client is not entitled to retrieve such materials.”  (Id. at *2.)    


The Court declined to award sanctions against plaintiffs’ counsel for the fees defendant incurred to bring the motion to obtain return of the confidential documents.  “Plaintiffs’ Counsel retained an electronic archive of [defendant’s] confidential information because it believed it had an ethical obligation to do so.  While this position was overly cautious and ultimately incorrect, there is no indication that it was taken in bad faith.”  (Ibid.)

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