Case Title: Costco v. Super. Ct.

Citation: 47 Cal. 4th 725

Docket Number: S163335

State: california

Court: California Supreme Court

Date: 2009-11-30T00:00:00Z

Document:
Filed 11/30/09 
 
 
 
IN THE SUPREME COURT OF CALIFORNIA 
 
 
 
COSTCO WHOLESALE CORPORATION, 
) 
 
 
)  
 
Petitioner, 
)  
 
 
) 
S163335 
 
v. 
)  
 
 
) 
Ct.App. 2/3 B197692 
THE SUPERIOR COURT OF LOS  
)  
ANGELES COUNTY, 
)  
Los Angeles County 
 
 
)  
Super. Ct. No. BC29636 
 
Respondent; 
)  
 
 
)  
GREG RANDALL et al., 
)  
 
 
)  
 
Real Parties in Interest. 
)  
 
______________________________________ ) 
 
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 
2 
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 conversations held by 
Hensley with two warehouse managers Costco had made available to her.  Costco, 
the managers, and Hensley understood the communications between the managers 
and Hensley were, and would remain, confidential.  Similarly, Costco and Hensley 
understood that Hensley‟s opinion letter was, and would remain, confidential.   
Several years later, real parties in interest, Costco employees (hereafter 
collectively referred to as plaintiffs), filed this class action against Costco, 
claiming that from 1999 through 2001 Costco had misclassified some of its 
managers as “exempt” employees and therefore had failed to pay them the 
overtime wages they were due as nonexempt employees.  In the course of the 
litigation, plaintiffs sought to compel discovery of Hensley‟s opinion letter.  
Costco objected on the grounds the letter was subject to the attorney-client 
privilege and the attorney work product doctrine.  Plaintiffs disagreed, arguing 
both that the letter contained unprivileged matter and that Costco had placed the 
contents of the letter in issue, thereby waiving the privilege.  
                                              
1 
Labor Code section 510, subdivision (a) requires payment at a rate of no 
less than time-and-one-half the regular rate of compensation for any work in 
excess of eight hours in one workday and any work in excess of 40 hours in any 
one workweek.  However, California Code of Regulations, title 8, section 11070, 
subdivision 1(A) provides an exemption for persons who for more than one-half of 
their work time are “employed in administrative, executive, or professional 
capacities.”  
3 
The trial court, over Costco‟s objection, ordered a discovery referee to 
conduct an in camera review of Hensley‟s opinion letter to determine the merits of 
Costco‟s claims of attorney-client privilege and work product doctrine.  The 
referee produced a heavily redacted version of the letter, stating her conclusion 
that although much of it “constitutes attorney client communications and/or the 
type of attorney observations, impressions and opinions plainly protected as work 
product,” those portions of text involving “factual information about various 
employees‟ job responsibilities” are protected by neither the privilege nor the 
doctrine.  The referee explained that statements obtained in attorney interviews of 
corporate employee witnesses generally are not protected by the corporation‟s 
attorney-client privilege and do not become cloaked with the privilege by reason 
of having been incorporated into a later communication between the attorney and 
the client.  She also found that while interviewing the two Costco managers, 
Hensley had acted not as an attorney but as a fact finder. The trial court, without 
ruling on plaintiffs‟ assertion that Costco had waived the privilege by placing the 
contents of the letter in issue, adopted the findings and conclusions of the referee 
and ordered Costco to produce a version of the letter in the same form as 
recommended and redacted by the referee.  
Costco petitioned the Court of Appeal for a writ of mandate, arguing the 
trial court had erred by ordering the in camera review of Hensley‟s opinion letter 
and by ordering disclosure of a redacted version of the letter.  The Court of Appeal 
denied the petition.  Without ruling on the merits of the trial court‟s discovery 
order or its decision to refer the opinion letter to the referee for in camera review, 
the court concluded Costco had not demonstrated that disclosure of the unredacted 
portions of the letter would cause it irreparable harm in the action, explaining the 
unredacted text simply referred to factual matters that would be easily 
discoverable by other means. 
4 
We hold the attorney-client privilege attaches to Hensley‟s opinion letter in 
its entirety, irrespective of the letter‟s content.  Further, Evidence Code section 
915 prohibits disclosure of the information claimed to be privileged as a 
confidential communication between attorney and client “in order to rule on the 
claim of privilege.”  (Id., subd. (a).)  Finally, contrary to the Court of Appeal‟s 
holding, a party seeking extraordinary relief from a discovery order that 
wrongfully invades the attorney-client relationship need not also establish that its 
case will be harmed by disclosure of the evidence. 
As we find the attorney-client privilege precludes discovery of the opinion 
letter, we do not consider whether the work product doctrine would also apply to 
prevent its discovery.  And, as the trial court‟s ruling extended only to the opinion 
letter, neither do we consider the separate but related question of whether, 
independent of the letter, the conversations between Hensley and Costco‟s 
warehouse managers might be subject to either the attorney-client privilege or the 
work product doctrine.2 
DISCUSSION 
I. 
The attorney-client privilege, set forth at Evidence Code section 954,  
confers a privilege on the client “to refuse to disclose, and to prevent another from 
disclosing, a confidential communication between client and lawyer . . . .”  The 
privilege “has been a hallmark of Anglo-American jurisprudence for almost 400 
                                              
2  
After the briefing was complete, Costco‟s counsel informed us the case had 
settled.  Costco, however, filed an unopposed request that we retain jurisdiction, 
pointing out the case raises issues of continuing public importance that have 
attracted the interest of several amici curiae.  We have discretion to retain 
jurisdiction in such circumstances (Rojas v. Superior Court (2004) 33 Cal.4th 407, 
415, fn. 3), and we exercise that discretion here. 
5 
years.”  (Mitchell v. Superior Court (1984) 37 Cal.3d 591, 599.)  Its fundamental 
purpose “is to safeguard the confidential relationship between clients and their 
attorneys so as to promote full and open discussion of the facts and tactics 
surrounding individual legal matters.  [Citation.]  . . .  [¶] 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.  As 
this court has stated:  „The privilege is given on grounds of public policy in the 
belief that the benefits derived therefrom justify the risk that unjust decisions may 
sometimes result from the suppression of relevant evidence.‟  [Citations.]”  (Id. at 
pp. 599-600.)  “[T]he privilege is absolute and disclosure may not be ordered, 
without regard to relevance, necessity or any particular circumstances peculiar to 
the case.”  (Gordon v. Superior Court (1997) 55 Cal.App.4th 1546, 1557.) 
A trial court‟s determination of a motion to compel discovery is reviewed 
for abuse of discretion.  (2,022 Ranch v. Superior Court (2003) 113 Cal.App.4th 
1377, 1387.)  An abuse of discretion is shown when the trial court applies the 
wrong legal standard.  (Zurich American Ins. Co. v. Superior Court (2007) 155 
Cal.App.4th 1485, 1493.)  However, when the facts asserted in support of and in 
opposition to the motion are in conflict, the trial court‟s factual findings will be 
upheld if they are supported by substantial evidence.  (HLC Properties, Ltd. v. 
Superior Court (2005) 35 Cal.4th 54, 60; D. I. Chadbourne, Inc. v. Superior Court 
(1964) 60 Cal.2d 723, 729.)  The party claiming the privilege has the burden of 
establishing the preliminary facts necessary to support its exercise, i.e., a 
communication made in the course of an attorney-client relationship.  (D. I. 
Chadbourne, Inc., at p. 729; Wellpoint Health Networks, Inc. v. Superior Court 
(1997) 59 Cal.App.4th 110, 123.)  Once that party establishes facts necessary to 
support a prima facie claim of privilege, the communication is presumed to have 
6 
been made in confidence and the opponent of the claim of privilege has the burden 
of proof to establish the communication was not confidential or that the privilege 
does not for other reasons apply.  (Evid. Code, § 917, subd. (a); Wellpoint Health 
Networks, Inc., at pp. 123-124.)  
That Costco engaged Hensley to provide it with legal advice and that the 
opinion letter was a communication between Costco‟s attorney (Hensley) and 
Costco are undisputed.  The letter was “confidential,” defined as “information 
transmitted between a client and his or her lawyer in the course of [the attorney-
client] relationship and in confidence by a means which, so far as the client is 
aware, discloses the information to no third persons other than those who are 
present to further the interest of the client in the consultation or those to whom 
disclosure is reasonably necessary for the transmission of the information or the 
accomplishment of the purpose for which the lawyer is consulted . . . .”  (Evid. 
Code, § 952.)  Indeed, the referee heavily redacted the letter because she believed 
it was a confidential communication between attorney and client.  That Hensley‟s 
opinion letter may not have been prepared in anticipation of litigation is of no 
consequence; the privilege attaches to any legal advice given in the course of an 
attorney-client relationship.  (Roberts v. City of Palmdale (1993) 5 Cal.4th 363, 
371; Zurich American Ins. Co. v. Superior Court, supra, 155 Cal.App.4th at 
p. 1495.)  And it is settled that a corporate client such as Costco can claim the 
privilege.  (Evid. Code, § 954, final par.; D. I. Chadbourne, Inc. v. Superior Court, 
supra, 60 Cal.2d at pp. 732, 736.)  The undisputed facts, therefore, make out a 
prima facie claim of privilege. 
II. 
The attorney-client privilege attaches to a confidential communication 
between the attorney and the client and bars discovery of the communication 
irrespective of whether it includes unprivileged material.  As we explained in 
7 
Mitchell v. Superior Court, supra, 37 Cal.3d at page 600:  “[T]he privilege covers 
the transmission of documents which are available to the public, and not merely 
information in the sole possession of the attorney or client.  In this regard, it is the 
actual fact of the transmission which merits protection, since discovery of the 
transmission of specific public documents might very well reveal the transmitter‟s 
intended strategy.”  We therefore held in Mitchell that a client could not be 
questioned about warnings from her attorney about the health effects of an 
industrial chemical even if the warnings might be described as factual matter 
rather than legal advice.  We observed:  “Neither 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. 601; see In re 
Jordan (1974) 12 Cal.3d 575, 580 [finding the attorney-client privilege attached to 
copies of cases and law review articles transmitted by an attorney to the attorney‟s 
client].) 
Focusing on the warehouse managers‟ statements to Attorney Hensley, 
plaintiffs point out that the statements of a corporate employee to the corporation‟s 
attorney are not privileged if the employee speaks as an independent witness, even 
if the employer requires the employee to make the statement.  (D. I. Chadbourne, 
Inc. v. Superior Court, supra, 60 Cal.2d at p. 737.)  They further maintain that 
when a corporate employer has more than one purpose for directing an employee 
to make a report, whether the employee‟s statement should be classified as that of 
the corporation or as that of an independent witness depends upon the employer‟s 
“dominant purpose” in requiring the employee to make the statement.  (Id. at 
p. 737.)  And they emphasize that the question of whether the employer‟s 
dominant purpose in requiring a report was for transmittal to an attorney in the 
course of professional employment, like the question of whether a particular 
employee‟s statement was that of an independent witness, is for the trial court or 
8 
other finder of fact, whose conclusion is binding on the reviewing court if 
supported by substantial evidence.  (HLC Properties, Ltd. v. Superior Court, 
supra, 35 Cal.4th at p. 60; Martin v. Workers’ Comp. Appeals Bd. (1997) 59 
Cal.App.4th 333, 346-347.) 
These points have little to do with the case before us.  In Chadbourne we 
considered whether a corporate employee, reporting to the corporation‟s attorney, 
was speaking on behalf of the corporation so that his report was in effect the 
communication of the corporate client.  (D. I. Chadbourne, Inc. v. Superior Court, 
supra, 60 Cal.2d at pp. 736-738.)  In that context, the dominant-purpose test 
determines whether the relationship between the attorney and the corporate 
employee is an attorney-client relationship; if the corporation‟s dominant purpose 
in requiring the employee to make a statement is the confidential transmittal to the 
corporation‟s attorney of information emanating from the corporation, the 
communication is privileged.  (Id. at p. 737.)  And as we have explained, because 
the privilege protects the transmission of information, if the communication is 
privileged, it does not become unprivileged simply because it contains material 
that could be discovered by some other means.  Chadbourne and its progeny 
therefore would be relevant if we were considering whether the statements of the 
warehouse managers interviewed by Hensley were themselves subject to the 
attorney-client privilege.  But these authorities are not relevant to the question 
before us:  whether the communication between Costco‟s attorney and Costco was 
privileged. 
Plaintiffs make a second, related point also directed at a concern not present 
here, asserting that a client cannot protect unprivileged information from 
discovery by transmitting it to an attorney.  As we explained in Greyhound Corp. 
v. Superior Court (1961) 56 Cal.2d 355, 397:  “ „Knowledge which is not 
otherwise privileged does not become so merely by being communicated to an 
9 
attorney.  [Citation.]  Obviously, a client may be examined on deposition or at trial 
as to the facts of the case, whether or not he has communicated them to his 
attorney.  [Citation.]  While the privilege fully covers communications as such, it 
does not extend to subject matter otherwise unprivileged merely because that 
subject matter has been communicated to the attorney.‟ ”  Thus, “a litigant may 
not silence a witness by having him reveal his knowledge to the litigant‟s attorney 
. . . .”  (D. I. Chadbourne, Inc. v. Superior Court, supra, 60 Cal.2d at p. 734.)  But 
again, we are not here concerned with whether the privilege covers the statements 
of the warehouse managers to Hensley.  
Plaintiffs next point out that the attorney-client privilege does not attach to 
an attorney‟s communications when the client‟s dominant purpose in retaining the 
attorney was something other than to provide the client with a legal opinion or 
legal advice.  (2,022 Ranch v. Superior Court, supra, 113 Cal.App.4th at pp. 1390-
1391; Aetna Casualty & Surety Co. v. Superior Court (1984) 153 Cal.App.3d 467, 
475.)  For example, the privilege is not applicable when the attorney acts merely 
as a negotiator for the client or is providing business advice (see Aetna Casualty & 
Surety Co., at p. 475); in that case, the relationship between the parties to the 
communication is not one of attorney-client.  But while plaintiffs insist Hensley‟s 
interviews of Costco‟s warehouse managers was simple fact gathering that could 
have been done by a nonattorney, they have never disputed that Costco retained 
Hensley, an expert in California wage and hour law, to provide it with legal advice 
regarding the exempt status of some of its employees, nor did the trial court base 
its discovery order on a finding that Costco‟s dominant purpose in retaining 
Hensley was to obtain her services as a fact gatherer.  The situation is comparable 
to that in Aetna, where in reversing the trial court‟s order allowing discovery of 
the attorney‟s files, the appellate court explained:  “This is a classic example of a 
client seeking legal advice from an attorney.  The attorney was given a legal 
10 
document (the insurance policy) and was asked to interpret the policy and to 
investigate the events that resulted in damage to determine whether Aetna was 
legally bound to provide coverage for such damage.”  (Id. at p. 476.)  Here, 
Hensley was presented with a question requiring legal analysis and was asked to 
investigate the facts she needed to render a legal opinion.  As we have explained, 
when the communication is a confidential one between attorney and client, the 
entire communication, including its recitation or summary of factual material, is 
privileged.  In sum, if, as plaintiffs contend, the factual material referred to or 
summarized in Hensley‟s opinion letter is itself unprivileged it may be 
discoverable by some other means, but plaintiffs may not obtain it by compelling 
disclosure of the letter. 
III. 
There is a second reason for overturning the discovery order.  Evidence 
Code section 915 provides, with exceptions not applicable here, that “the presiding 
officer may not require disclosure of information claimed to be privileged under 
this division[3] . . . in order to rule on the claim of privilege . . . .”  (Evid. Code, 
§ 915, subd. (a).)  Section 915 also prohibits disclosure of information claimed to 
be privileged work product under Code of Civil Procedure section 2018.030, 
subdivision (b), but as to the work product privilege, if the court is unable to rule 
on the claim of privilege “without requiring disclosure of the information claimed 
to be privileged, the court may require the person from whom disclosure is sought 
                                              
3  
“[T]his division,” division 8 of the Evidence Code, includes not just the 
attorney-client privilege (Evid. Code, § 954), but a variety of others arising out of 
confidential relationships, such as the marital privilege (id., § 980), the physician-
patient privilege (id., § 994), the psychotherapist-patient privilege (id., § 1014) and 
the clergy-penitent privilege (id., § 1033). 
11 
or the person authorized to claim the privilege, or both, to disclose the information 
in chambers out of the presence and hearing of all persons except the person 
authorized to claim the privilege and any other persons as the person authorized to 
claim the privilege is willing to have present.”  (Evid. Code, § 915, subd. (b).)  No 
comparable provision permits in camera disclosure of information alleged to be 
protected by the attorney-client privilege.  (Southern Cal. Gas Co. v. Public 
Utilities Com. (1990) 50 Cal.3d 31, 45, fn. 19.)4  Nonetheless, the trial court 
caused Hensley‟s opinion letter to be reviewed at the in camera hearing, and its 
order compelling Costco to produce the redacted version of the letter was based in 
large part on the referee‟s review of the very information Costco claimed to be 
privileged. 
In arguing in favor of the trial court‟s ruling, plaintiffs cite Moeller v. 
Superior Court (1997) 16 Cal.4th 1124, 1135, and Cornish v. Superior Court 
(1989) 209 Cal.App.3d 467, 480, for the proposition that despite the unequivocal 
language of Evidence Code section 915 subdivision (a), the section‟s prohibition 
“is not absolute,” and a litigant might be required to reveal some information in 
camera to enable the court to determine whether a communication is subject to the 
attorney-client privilege.  But in citing these cases, plaintiffs fail to recognize the 
critical distinction between holding a hearing to determine the validity of a claim 
of privilege and requiring disclosure at the hearing of the very communication 
                                              
4  
Because a court may order disclosure of information in order to determine 
whether it is protected by the work product doctrine, but may not order its 
disclosure to determine if it is subject to the attorney-client privilege, a court 
should without requiring disclosure first determine if the information is subject to 
the attorney-client privilege.  If the court determines the privilege does not apply, 
it may then consider whether to order disclosure of the information at an in camera 
hearing for the purpose of deciding if it is protected work product. 
12 
claimed to be privileged.  Evidence Code section 915, while prohibiting 
examination of assertedly privileged information, does not prohibit disclosure or 
examination of other information to permit the court to evaluate the basis for the 
claim, such as whether the privilege is held by the party asserting it.  (Moeller, at 
p. 1135 [hearing on type of attorney-trustee communications to determine who 
holds the privilege].)  Evidence Code section 915 also does not prevent a court 
from reviewing the facts asserted as the basis for the privilege to determine, for 
example, whether the attorney-client relationship existed at the time the 
communication was made, whether the client intended the communication to be 
confidential, or whether the communication emanated from the client.  (Cornish, 
at p. 480.)  Accordingly, while the prohibition of Evidence Code section 915 is not 
absolute in the sense that a litigant may still have to reveal some information to 
permit the court to evaluate the basis for the claim of privilege (Moeller, at 
p. 1135), it does not follow that courts are free to ignore the section‟s prohibition 
and demand in camera disclosure of the allegedly privileged information itself for 
this purpose.    
Plaintiffs also cite Lipton v. Superior Court (1996) 48 Cal.App.4th 1599, 
but the court in that case distinguished between documents that “would, in all 
probability, be protected by the attorney-client privilege” (id. at p. 1618) and those 
that might be protected by a qualified privilege, not subject to the prohibition of 
Evidence Code section 915, subdivision (a). With respect to the documents 
purportedly protected by the qualified privilege, the court suggested it would be an 
abuse of discretion to permit discovery “without the court first examining those 
documents and communications, by in camera inspection, to determine if they 
have sufficient relevance to the requesting party‟s case to overcome the . . . claim 
of qualified privilege.”  (Lipton, at p. 1618.)  That suggestion cannot be interpreted 
13 
to hold that a court is free to order in camera inspection of documents to determine 
if they are subject to a privilege to which Evidence Code section 915 applies.  
The Court of Appeal read our decision in In re Lifschutz (1970) 2 Cal.3d 
415 to hold that in camera disclosure of privileged information is permissible to 
determine if a party has waived the privilege or if the communication falls under 
some exception to the privilege.  But in that case, we found the patient had waived 
the psychotherapist-patient privilege by initiating litigation that put his mental and 
emotional state at issue.  Notwithstanding the waiver, we held caution should be 
exercised in disclosing the content of the patient‟s communications with his 
psychiatrist “to avoid unwarranted intrusions into the confidences of the 
relationship.”  (Id. at p. 431.)  Because only the patient could know both the nature 
of the ailments for which he was seeking recovery and also the general content of 
the psychotherapist communications, we held “the burden rests upon the patient 
initially to submit some showing that a given confidential communication is not 
directly related to the issue he has tendered to the court.”  (Id. at p. 436.)  We 
stated:  “Although ordinarily a patient cannot be required to disclose privileged 
information in order to claim the privilege (Evid. Code, § 915, subd. (a)), because 
the privileged status of psychotherapeutic communications under the patient-
litigant exception depends upon the content of the communication, a patient may 
have to reveal some information about a communication to enable the trial judge 
to pass on his claim of irrelevancy.  Upon such revelation, the trial judge should 
take necessary precautions to protect the confidentiality of these communications; 
for example, he might routinely permit such disclosure to be made ex parte in his 
chambers.”  (Id. at p. 437, fn. 23.)  Thus, although we observed that when the 
patient-litigant‟s information about the contents of a communication might 
compromise its confidentiality the court may appropriately review the information 
in camera, we said nothing about reviewing the communication itself.  In such 
14 
instances, however, the party claiming the privilege may choose to reveal the 
communication in camera to prevent the court from ordering disclosure of private 
information bearing no relevance to the litigation.  Such a procedure does not 
violate Evidence Code section 915 because the court, without examining the 
confidential communication, has previously ruled that an exception to the 
privilege applies, and the in camera review is now sought by the party holding the 
privilege to prevent its disclosure.  Similarly, nothing in Evidence Code section 
915 prevents a party claiming a privilege from making an in camera disclosure of 
the content of a communication to respond to an argument or tentative decision 
that the communication is not privileged. 
Finally, the attorney-client privilege is a legislative creation, which courts 
have no power to limit by recognizing implied exceptions.  (Roberts v. City of 
Palmdale, supra, 5 Cal.4th at p. 373.)  Concern that a party may be able to prevent 
discovery of relevant information therefore provides no justification for inferring 
an exception to Evidence Code section 915.  As noted earlier, it has long been 
understood that “ „[t]he privilege is given on grounds of public policy in the belief 
that the benefits derived therefrom justify the risk that unjust decisions may 
sometimes result from the suppression of relevant evidence.‟ ”  (Mitchell v. 
Superior Court, supra, 37 Cal.3d at p. 600.)  And 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.  (Cornish v. Superior Court, supra, 
209 Cal.App.3d at p. 480.) 
Because we hold that a court may not order disclosure of a communication 
claimed to be privileged to allow a ruling on the claim of privilege, we disapprove 
two cases plaintiffs have cited in support of the trial court‟s orders.  In Martin v. 
Workers’ Comp. Appeals Bd., supra, 59 Cal.App.4th at page 347, the court, 
without considering Evidence Code section 915, subdivision (a), ordered a 
15 
workers‟ compensation judge to conduct an in camera review of the statements of 
employee witnesses to determine whether the statements were from independent 
witnesses or had emanated instead from the corporate employer.  As we have 
explained, Evidence Code section 915 prohibits a court from ordering in camera 
review of information claimed to be privileged in order to rule on the claim of 
privilege. 
Insofar as inconsistent with our conclusion, we also disapprove 2,022 
Ranch v. Superior Court, supra, 113 Cal.App.4th 1377, an insurance bad faith 
action.  At issue were communications transmitted to the insurer from its in-house 
claims adjusters who also were attorneys.  The insurer claimed all the 
communications were privileged, as involving legal advice emanating from its 
attorneys, whereas the petitioner asserted none were, as the attorneys were serving 
merely as claims adjusters.  The Court of Appeal distinguished communications 
reporting the results of factual investigations from those reflecting the rendering of 
legal advice, held only the latter were privileged, and ordered the trial court to 
review each of the communications to determine its dominant purpose.  (Id. at 
p. 1397.)  In this respect, the court erred.  The proper procedure would have been 
for the trial court first to determine the dominant purpose of the relationship 
between the insurance company and its in-house attorneys, i.e., was it one of 
attorney-client or one of claims adjuster-insurance corporation (as some of the 
evidence suggested, see id. at pp. 1385, 1397-1398).  The corporation, having the 
burden of establishing the preliminary fact that the communications were made 
during the course of an attorney-client relationship (D. I. Chadbourne, Inc. v. 
Superior Court, supra, 60 Cal.2d at p. 729), was free to request an in camera 
review of the communications to aid the trial court in making that determination, 
but the trial court could not order disclosure of the information over the 
corporation‟s objection.  If the trial court determined the communications were 
16 
made during the course of an attorney-client relationship, the communications, 
including any reports of factual material, would be privileged, even though the 
factual material might be discoverable by some other means.  If the trial court 
instead concluded that the dominant purpose of the relationship was not that of 
attorney and client, the communications would not be subject to the attorney-client 
privilege and therefore would be generally discoverable.  However, even then, the 
corporation would be entitled to request an in camera review of a particular 
communication to support a claim that it should be protected despite the general 
absence of an attorney-client relationship. 
Plaintiffs also cite OXY Resources California LLC v. Superior Court (2004) 
115 Cal.App.4th 874, 896, and Cornish v. Superior Court, supra, 209 Cal.App.3d 
at page 480, where the appellate court observed that notwithstanding Evidence 
Code section 915, subdivision (a), courts have allowed in camera review of 
information claimed to be privileged where necessary to determine whether an 
exception to the privilege applies.  As we have explained, section 915 prohibits 
disclosure of information claimed to be privileged in order to determine if a 
communication is privileged.  But after the court has determined the privilege is 
waived or an exception applies generally, the court to protect the claimant‟s 
privacy may conduct or order an in camera review of the communication at issue 
to determine if some protection is warranted notwithstanding the waiver or 
exception. 
IV. 
The remaining question is whether the Court of Appeal was justified in 
denying Costco relief despite the invalidity of the trial court‟s order.  The court 
concluded extraordinary relief was not warranted because Costco had not 
demonstrated it would be irreparably harmed by the release of the opinion letter in 
redacted form because much of the remaining material could easily be obtained by 
17 
some other means.  This reasoning implies that the harm in an order compelling 
disclosure of privileged information is the risk the party seeking disclosure will 
obtain information to which it is not entitled.  But, as we have said, the 
fundamental purpose of the attorney-client privilege is the preservation of the 
confidential relationship between attorney and client (Mitchell v. Superior Court, 
supra, 37 Cal.3d at p. 599), and the primary harm in the discovery of privileged 
material is the disruption of that relationship (Roberts v. Superior Court (1973) 9 
Cal.3d 330, 336), not the risk that parties seeking discovery may obtain 
information to which they are not entitled.  As we explained in Roberts:  “The 
need for the availability of the prerogative writs in discovery cases where an order 
of the trial court granting discovery allegedly violates a privilege of the party 
against whom discovery is granted, is obvious.  The person seeking to exercise the 
privilege must either succumb to the court‟s order and disclose the privileged 
information, or subject himself to a charge of contempt for his refusal to obey the 
court‟s order pending appeal.  The first of these alternatives is hardly an adequate 
remedy and could lead to disruption of a confidential relationship.  The second is 
clearly inadequate as it would involve the possibility of a jail sentence and 
additional delay in the principal litigation during review of the contempt order.  
Thus, the use of the prerogative writ in a case [seeking review of an order 
compelling disclosure of records claimed to be subject to a privilege] is proper.”  
(Ibid.) 
Accordingly, Costco is entitled to relief because the trial court‟s order 
threatened the confidential relationship between Costco and its attorney.  Costco 
was not also required to demonstrate that its ability to present its case would be 
prejudiced by the discovery of the opinion letter.  
18 
DISPOSITION 
The judgment of the Court of Appeal is reversed.  The case is remanded to 
that court with directions to issue a writ of mandate vacating the trial court‟s order 
compelling discovery and to remand the case to the trial court for further 
proceedings consistent with this opinion. 
 
 
 
 
 
 
 
WERDEGAR, J. 
WE CONCUR: 
GEORGE, C. J. 
BAXTER, J. 
CHIN, J. 
MORENO, J. 
CORRIGAN, J. 
O‟LEARY, J.* 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
________________________________________ 
* 
Associate Justice of the Court of Appeal, Fourth Appellate District, 
Division Three, assigned by the Chief Justice pursuant to article VI section 6 of 
the California Constitution.
1 
 
 
 
 
 
 
 
 
CONCURRING OPINION BY GEORGE, C. J. 
 
 
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. 
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. 6), 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 p. 15.)  The privilege does not apply outside the context of such a 
                                              
1 
All further statutory references are to the Evidence Code unless otherwise   
indicated. 
2 
relationship, certainly, but we should not forget that the purpose of the 
communication also is critical to the application of the privilege. 
The attorney-client privilege applies to a confidential communication 
between the attorney and the client — the latter being defined as a person who 
“consults a lawyer for the purpose of retaining the lawyer or securing legal service 
or advice from him in his professional capacity.” (§ 951.)   
A confidential communication between the attorney and the client is 
defined as “information transmitted between a client and his or her lawyer in the 
course of that relationship.”  (§ 952, italics added.)  The statutory requirement that 
the communication occur “in the course of” the attorney-client relationship is 
consistent with the law as it existed prior to the 1965 enactment of section 952.  
(Cal. Law Revision Com. com., 29B pt. 3A West‟s Ann. Evid. Code (2009 ed.) 
foll. § 952, p. 307.)  Prior to the enactment of the statute, it long had been 
established that, in order to be privileged, it was necessary that the communication 
be made for the purpose of the attorney‟s professional representation, and not for 
some unrelated purpose.  (Solon v. Lichtenstein (1952) 39 Cal.2d 75, 80 [“A 
communication to be privileged must have been made to an attorney acting in his 
professional capacity toward his client”]; McKnew v. Superior Court (1943) 23 
Cal.2d 58, 64-65; Carroll v. Sprague (1881) 59 Cal. 655, 659-660; Satterlee v. 
Bliss (1869) 36 Cal. 489, 509; see also Chicago Title Ins. Co. v. Superior Court 
(1985) 174 Cal.App.3d 1142, 1151 [“It is settled that the attorney-client privilege 
is inapplicable where the attorney merely acts as a negotiator for the client, gives 
business advice or otherwise acts as a business agent”]; Montobello Rose Co. v. 
Agricultural Labor Relations Bd. (1981) 119 Cal.App.3d 1, 32 [communications 
necessary to “secure or render legal service or advice” are privileged].)  Secondary 
sources reflect the same understanding of the privilege.  (2 Witkin, Cal. Evidence 
(4th ed. 2000) Witnesses, § 116, p. 373, and cases cited [“The burden is on the 
3 
claimant of the privilege to establish the condition of professional consultation”]; 
31 Cal.Jur.3d (2002) Evidence, § 488, p. 764.)   
When section 952 is viewed as a whole, it is even clearer that the 
Legislature intended to extend the protection of the privilege solely to those 
communications between the lawyer and the client that are made for the purpose 
of seeking or delivering the lawyer‟s legal advice or representation.  Thus the 
statute identifies a “ „confidential communication‟ ” in general terms as meaning 
“information transmitted between a client and his or her lawyer in the course of 
that relationship,” but the provision also supplies more specific examples of what 
is meant by adding that a confidential communication “includes a legal opinion 
formed and the advice given by the lawyer in the course of that relationship.”  
Under the principle of statutory construction known as “ejusdem generis,” the 
general term ordinarily is understood as being “ „restricted to those things that are 
similar to those which are enumerated specifically.‟ ”  (Harris v. Capital Growth 
Investors XIV (1991) 52 Cal.3d 1142, 1160, fn. 7.)  It follows that in order to be 
privileged, the information transmitted between the lawyer and the client must be 
similar in nature to the enumerated examples — namely, the lawyer‟s legal 
opinion or advice. 
Our description of a confidential communication in Roberts v. City of 
Palmdale (1993) 5 Cal.4th 363, is instructive.  In that decision, we explained that 
such a communication in the context of section 952 need not concern litigation; 
rather it suffices that the communication consist of information transmitted 
between the client and the lawyer within the scope of the attorney-client 
relationship.  (Roberts v. City of Palmdale, supra, 5 Cal.4th at p. 371.)  We further 
explained that “the privilege applies not only to communications made in 
anticipation of litigation, but also to legal advice when no litigation is threatened.”  
(Ibid.)  Our analysis was not restricted to an examination of the purpose of the 
4 
attorney-client relationship, but rather considered whether the nature of the 
communication itself fell within the bounds of the statute.  
In another example that demonstrates the importance of the purpose or 
nature of the communication rather than the more general purpose of the attorney-
client relationship in this context, we have recognized that “[k]nowledge that is 
not otherwise privileged does not become so merely by being communicated to an 
attorney,” and that “ „the forwarding to counsel of nonprivileged records, in the 
guise of reports, will not create a privilege with respect to such records and their 
contents where none existed theretofore.‟ ”  (Wells Fargo Bank v. Superior Court 
(2000) 22 Cal.4th 201, 210-211.)   
Ordinarily, when an attorney-client relationship exists, communications 
between parties to the relationship are made for the purpose of receiving or 
rendering legal advice, and the purpose of the communication rarely will be in 
dispute.  In the present case, the claimant of the privilege adequately demonstrated 
that the purpose of the challenged opinion letter was to advise the client upon a 
legal matter.  Sometimes, however, the dominant purpose of the communication 
will be a critical consideration.  As discussed, communications between persons 
who stand in an attorney-client relationship are not privileged in every instance, 
because it sometimes occurs that an attorney-client relationship exists, but that the 
attorney also acts in another capacity for the client, as, for example, the client‟s 
agent in a business transaction.  In view of the requirements of section 952 and the 
authorities noted above, the question of the purpose of the communication arises 
regardless of what element predominates in the relationship of the attorney and the 
client.  
 
 
 
 
 
 
 
GEORGE, C. J. 
 
1 
 
See next page for addresses and telephone numbers for counsel who argued in Supreme Court. 
 
Name of Opinion Costco Wholesale Corporation v. Superior Court 
__________________________________________________________________________________ 
 
Unpublished Opinion 
Original Appeal 
Original Proceeding 
Review Granted XXX 161 Cal.App.4th 488 
Rehearing Granted 
 
__________________________________________________________________________________ 
 
Opinion No. S163335 
Date Filed: November 30, 2009 
__________________________________________________________________________________ 
 
Court: Superior 
County: Los Angeles 
Judge: Emilie H. Elias 
 
__________________________________________________________________________________ 
 
Attorneys for Appellant: 
 
Seyfarth Shaw, Kenwood C. Youmans, David D. Kadue, Aaron R. Lubeley and Ann H. Qushair for 
Petitioner. 
 
Fenwick & West, Victor Schachter, Michael A. Sands and Dan Ko Obuhanych for California Employment 
Law Council as Amicus Curiae on behalf of Petitioner. 
 
Robie & Matthai, James R. Robie, Steven S. Fleischman; Haight, Brown & Bonesteel and J. Alan Warfield 
for Association of Southern California Defense Counsel and Los Angeles County Bar Association as Amici 
Curiae on behalf of Petitioner. 
 
 
 
__________________________________________________________________________________ 
 
Attorneys for Respondent: 
 
No appearance for Respondent. 
 
Hagens Berman Sobol Shapiro, Reed R. Kathrein, Lee M. Gordon, Elaine T. Byszewski, Steve W. Berman; 
Rehwald Glasner & Chaleff, Rehwald Rameson Lewis & Glasner, Lawrence Glasner, William Rehwald 
and Daniel Chaleff for Real Parties in Interest. 
 
2 
 
 
 
 
 
Counsel who argued in Supreme Court (not intended for publication with opinion): 
 
David D. Kadue 
Seyfarth Shaw 
2029 Century Park East, 33d Floor 
Los Angeles, CA  90067-3063 
(310) 277-7200 
 
Victor Schachter 
Fenwick & West 
801 California Street 
Mountain View, CA  94041 
(650) 988-8500 
 
Lee M. Gordon 
Hagens Berman Sobol Shapiro 
700 South Flower, Suite 2940 
Los Angeles, CA  90017-4101 
(213) 330-7149