Ethics in Brief

Ethics in Brief is designed to present ethical issues that practitioners might well face on a daily basis. It is a service of the Legal Ethics Committee of the San Diego County Bar Association.

California Supreme Court Opinion Holds Not All Attorney Invoices to Clients are Treated the Same for Attorney Client Privilege Protections

In a 4-3 decision, the California Supreme Court closed 2016 with an opinion finding “that the attorney-client privilege does not categorically shield everything in a billing invoice from [Public Records Act] disclosure. But invoices for work in pending and active legal matters are so closely related to attorney-client communications that they implicate the heartland of the privilege. The privilege therefore protects the confidentiality of invoices for work in pending and active legal matters.” (Los Angeles County Board of Supervisors v. Superior Court (December. 29, 2016, No. S226645) --- P.3d ----2 Cal.5th 282, 2016 WL 7602131, at *1 (“Board of Supervisors”).) 

The decision would appear to enhance the ability to obtain disclosure of legal invoices for past matters. It arose from the ACLU and a local citizen submitting Public Records Act requests to the Los Angeles County Board of Supervisors and the Office of the County Counsel for invoices from outside law firms for work related to specific lawsuits alleging excessive force against jail inmates. Los Angeles County produced invoices for lawsuits that were no longer pending, with attorney-client privilege and work product redacted, but refused to produce invoices for ongoing lawsuits. 

The county claimed that the invoices for work performed by outside counsel in pending litigation were exempt from disclosure based on two provisions of the Public Records Act (“PRA”): (1) Government Code section 6254(k), which exempts from disclosure records subject to the attorney-client privilege; and (2) Government Code section 6255(a), a catchall provision that allows a public agency to withhold a record if the public interest favors nondisclosure. 

After the Court of Appeal found all invoices and their contents privileged based on Supreme Court’s decision in Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725 (“Costco”), the Supreme Court considered only the scope of the exemption in section 6254(k) under the attorney-client privilege noting that “[w]hat the PRA appears to offer is a ready solution for records blending exempt and nonexempt information: ‘Any reasonable segregable portion of a record shall be available for inspection by any person requesting the record after deletion of the portions that are exempted by law.” (Board of Supervisors, supra, at *3 quoting Govt. Code §6253(a).) 

After reviewing statutory protections afforded to attorney client communications contained in Evidence Code section 952, the Supreme Court stated “[i]nvoices for legal services are generally not communicated for the purpose of legal consultation” but are “communicated for the purpose of billing the client and to the extent they have no other purpose or effect, they fall outside the scope of an attorney’s professional representation.” It concluded that billing the client is a relationship which “evokes an arm’s-length transaction between parties in the market for professional services more than it does the diligent but discreet conveyance of facts and advice that epitomizes the bond between lawyer and client.”  (Id. at *5.) The Court did allow that “while billing invoices are generally not ‘made for the purpose of legal representation,’ the information contained within certain invoices may be within the scope of the privilege.”  (Id. at *6.) 

The majority remanded the matter to be determined consistent with its opinion that “the contents of an invoice are privileged only if they either communicate information for the purpose of legal consultation or risk exposing information that was communicated for such a purpose.”  (Id. at *8.) 

Justice Werdegar wrote in dissent the “majority’s decision to add consideration of a communication’s purpose as an additional, nonstatutory element to the Legislature’s definition of a ‘confidential communication’ is unsupported in law.”  (Id. at *10.)  The dissent stressed that the “majority’s line of analysis ignores the core reasoning of Costco that section 954 prohibits courts from parsing a communication between lawyer and client in order that those parts not involving a legal opinion or advice can be disclosed.”  (Id. at *11; Costco, supra, 47 Cal.4th at p. 736 [“when the communication is a confidential one between attorney and client, the entire communication, including its recitation or summary of factual material, is privileged.”])   

Although the decision ultimately focused on whether the invoices related to a pending, as opposed to closed, matters and referenced the PRA’s requirement that exempt information be segregated from non-exempt information, the decision’s analysis is sure to have implications beyond PRA litigation given its contrast with Costco’s holding that "[n]either the statutes articulating the attorney-client privilege nor the cases which have interpreted it make any differentiation between ‘factual’ and ‘legal’ information." (Id. at p. 734.)

At the threshold, how does a trial court determine if the communication is for the purpose of legal advice or not when the Legislature has prohibited court-ordered disclosure of disputed documents for in camera review to resolve an attorney-client privilege claim? (Evid. Code § 915(a); Costco, supra, 47 Cal.4th at p. 739 ["because the privilege protects a transmission irrespective of its content, there should be no need to examine the content in order to rule on a claim of privilege"].)

Given the majority’s statement that “[i]nvoices for legal services are generally not communicated for the purpose of legal consultation”, are invoices presumed not to contain privileged information?  The majority’s description of invoices may lead to litigation over redacted invoices whether produced in discovery where fees are sought as damages (see, e.g., “tort of another” doctrine) or submitted in an application for attorney fees.  The reach of the decision will hinge on whether courts rely on it outside of Public Records Act litigation.

-- Andrew Servais

**No portion of this summary is intended to constitute legal advice. Be sure to perform independent research and analysis. Any views expressed are those of the author only and not of the SDCBA or its Legal Ethics Committee.**