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.

Applying the Rico Standard in Non-Traditional Cases 

Cumis Counsel is defending heavily contested litigation regarding an automobile accident. During the proceedings, an email between the insured and the insurance company is produced to Plaintiff’s Counsel. The email does not include an attorney as the author or recipient; indeed, it was sent before any attorney was hired by the defendant or the insurance company.

Cumis Counsel notifies Plaintiff’s Counsel that the insurer-insured email is privileged and was inadvertently produced, and asks Plaintiff’s Counsel to destroy it. Plaintiff’s Counsel had already seen the email and was planning on using it during an upcoming deposition. What are Plaintiff’s Counsel’s obligations?

By now, California attorneys should be familiar with the Rico/State Fund rule regarding inadvertently disclosed privileged information. An attorney who inadvertently receives plainly privileged documents (i.e., communications between an attorney and a client) must:

  • Refrain from examining the materials any more than is essential to ascertain if the materials are privileged;
  • Immediately notify the sender that he is in possession of potentially privileged documents; and
  • Proceed to resolve the situation by agreement, or turn to the court for guidance.

Failure to follow these directives may result in disqualification, although exposure to confidences of an adversary, standing alone, does not warrant disqualification. In Rico, the privilege that applied was the attorney-client privilege, but the Supreme Court noted that the rule applies not only to materials that obviously appear to be covered under “an attorney-client privilege,” but also materials that “otherwise clearly appear to be confidential and privileged.” 

In the fact pattern above, the communications are with an insurance carrier, not an attorney. Thus, the produced documents may not have been “plainly privileged” when they were received. But under the rule in Travelers Ins. Companies v. Superior Court, communications with an insurance carrier may be subject to the attorney-client privilege, even before an attorney is hired, depending on the status of the matter and the terms of the insurance policy. Moreover, Rico itself held that the State Fund standard applies to other obviously confidential or privileged documents.

Thus, even though the materials may not have started out as “plainly privileged,” once the receiving party is notified that the materials are privileged, the prudent course is to follow Rico: refrain from further examining or using the materials while any dispute as to their privileged status is resolved.

Discussing Rico v. Mitsubishi Motors Corp. (2007) 42 Cal.4th 807, State Compensation Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644, and Travelers Ins. Companies v. Superior Court (1983) 143 Cal.App.3d 436. See also Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725; Clark v. Superior Court (2011) 196 Cal. App. 4th 37; Cal. State Bar Formal Opinion No. 2013-188.

-- Leah Strickland

**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.**