and the rest of my time ago in my co counsel this is not your typical inadvertent disclosure case the statements at issue here or voluntarily provided by gene robinson after source america learned of the existence of the tapes containing the excerpts i demanded the mr cragg the attorney that was disqualified cease using the tapes and returned them as if they were belong to source america return them to source  america and initially source america didn't even identify the privileged communications in the tapes it simply asserted a blanket waiver per blanket privilege over everything it wasn't until tapes and mr craig responded saying there's no nothing privileged here because all of that those statements are from your attorney gene robinson who is acting as a monitor under the party settlement agreement to assist bonafied in the program so his response was reasonable she is the general counsel she is the senior vice president and she is the compliance  findings are we reviewing that for clear air at this point the we're here on a red and the issue it started clearly erroneous as a matter of law that's that's that's what we're looking at the third bombing factor impact of that was that there was a presumption of privilege because under california law which is the law that the of responding or applied that's permissible it's not permissible under the federal rules the federal rules have a specific eight part test under rule where there is no presumption the burden of proof is is strictly can further the privilege strictly construed and it's up to source america to prove every element including the fact or no waiver it was simply an error to use the wrong law on this issue but you still had the opportunity to argue that there was a waiver even if one looked at california law right we have the burden of proof to make that argument correct agreement if i know waiver based upon turning things over to the u s attorney but i didn't see him did i miss a discussion generally of this was the general counsel and chief compliance officer that person is has the are so did i miss the discussion below about a parent authority based upon someone being a general counsel there are very vague references to limitations on that authority that source america claims handcuffed her and took away her ability to have authority include and none of those were known to mr pratt of course i mean they require being communicated to the recipient of the communication right right that didn't happen so  what we what we have here is if you follow the rules standard and the eight excerpts and you actually apply the correct law here the federal law there's a lack of any and any evidence supporting three of them  for the first the third of the eighth now the first element of rule is where legal advice of any kind is sought the third not read the second one because the third one is in a sense unless you read the second one is sought from a professional legal adviser in his capa such and the confirmation relating to that purpose so the you have to have it a request and the needs to be communicated both of those are missing here the evidence that was supplied were submitted below by by source america was a declaration from a gentleman named fields who was at the time the senior vice president of strategy and innovation at source america and his statement and he every time there's a a in his declaration this is the preamble to essentially legal advice that she alleges she provided to source america concerns the topics of the type that she was asked to opine on a source america's continuing to review its files to determine if robinson actually provided this information so there's never any and never any communication made acknowledged by source america here or that even that this information was requested by source america but with those two elements missing under the rule test there can't be a privilege and then of course the a fellow meant which is waiver which we've already discussed we have general counsel senior vice president of compliance officer who has a reason to be talking to him so wasn't the argument of apparent authority fully called to the district judges and or magistrates attention as opposed to simply waiver through the settlement agreement corporation and the corporation itself has to speak for somebody now the attorney client privilege isn't inanimate and the logical people to be able to speak on behalf and way that privilege if they're in fact is a privilege here is the general counsel and as it morning workout i'm going to address three points of clarification on the ethical issue the first one is that source america failed to meet the threshold requirements for applying the rico standard in this case there is no up by rico and the state fund court and i refer you to web of the paint it self for the reason for that is sixteen of four they're talking about delicate balance between a lawyers ability represent their client and meet their objectives the same time gives appropriate consideration for their science confidential information whenever a lawyer seeks this from think fun whenever a worse seeks to hold another a lawyer accountable for misuse of in disqualifying now when you apply that standard in the cases in california inadvertence has two applications the first one is mistake of course the dock of production where the documents documents whatever the documents and so it's really apparent that it is being transmitted to the wire with out the owner's authorization under either scenario you'd have a predicate finding of it  documents or whatever it is that the justice of the case requires so there isn't this the second point i'd make there is no requirement under the state fund rico standard that the information must  be turned or it has to be put before the court those types of cases where the court criticises council for not bringing the matter to the court's attention are cases where the court excuse me the council h not the property of source america tapes are simply evidence of communications that were voluntarily made by the general counsel for source america to mr lopez he has a right under neal  bell other cases to to bring an intermission to attention of his lawyer to get advice that that's perfectly permissible in california the court held properly that the lawyer had a pretty reasonable to transcribe them for the purpose of being able to review them that was not in principle the court also found that there was no evidence of any improper use by mr pray under rico we don't disqualify the lawyer because we're concerned about what the client may or may not have done communication occurred in in october two thousand and fourteen throughout the putting state there is there's been no discovery at this point mr craig was not involved in the underlying things he is aware that there are monitoring transcripts discovery was forthcoming a few months down the road there is nothing to prevent the discoverability of these tapes is no different that if mr lopez took notes of the conversations with ms robinson or contemporaneous memorandum of the conversations the tapes are not that your ship the transcripts are not the issue of the issue is whether or not mr craig violated rico in october two thousand and fourteen and there is a lack of sufficient evidence to support that finding a court history court is applying the california standard said well they're presumptively privilege rico doesn't apply a presumption of privilege under the ethical duties of lawyers so that's that's that's him that's an error in our opinion number two there is no ethical standard to california law to bring the matter to the attention of a court source america says well we were misled as a legal standard misapplied but that there is a lack of substantial evidence that there was any unfair advantage or anything done by mr craig that undermined the progress of the case or some of it had a continuing extraordinary relief and when the district court below decided that disqualification was appropriate the district did issue a reasoned decision including addressing that very point that you just race which is whether disqualifications appropriate aside from the three recordings reference in the first amendment complaint repeatedly advise bonafied that the robinson tapes contain privileged information demanded they return but despite the notices and also the court of federal claims in the other case had expressed concerns regarding the privilege issue and the legality surrounding the robinson tapes than spite all of that notice mr craig the lawyer retained the transcript and recordings and failed to seek the court guidance on privilege and continued to transcribe the tapes through at least january two thousand and fifteen and he goes on to acknowledge that it's not a punitive measure disqualification but he thinks that the judge thinks that in under these particular circumstances the remedy of exclusion is insufficient and that this qualification is necessary to maintain the integrity of this will process and the reason he gave for that is because now mr craig cannot unlearnt t information that he's had in his possession for well over two years now those sort of findings coupled with the extremely deferential review that we need to engage in how does that  leeton overturning unless the court's factual findings were just completely untapped third from the record in this case your honor they they they are erroneous as a matter of law because the court applied the wrong standard and in evaluating the rico ethical duties mr crane i've covered that it's been briefed he applied the wrong standard they he imposed a requirement that doesn't exist in california that is that when someone else in their number two imposes a requirement that is not in the law california that at that point october two thousand and fourteen not in two thousand and fifteen that mr craig was ethically obligated to either return  tapes or bring the merit to the court there is no authority either in california that holds that and the cases that are cited in the federal circuit all involve in the permissible use by the lawyer of the privileged information which is obviously privilege mr craig as a matter finding in this case made no imprimis of will use these tapes were discoverable they were in the process of being produced pursuant to requests for production documents and subpoenas there is no basis for the court that there's no substantial evidence supporting those findings lastly it is punitive it is not prophylactic and i think a source america honestly impose the remedy for a punishment on mr craig mr craig did not have any use of these whatever the client did in that in the court of claims case or someone else may have done some third party may have done is not a because the court applied the improper legal standard i call for that i will reserve our time thank you good morning honors that kleiner on behalf of real party in interest and defendant source america magistrate judge barr to conclude a turning crack acted in bad faith and violated his ethical duties in the way he handled the robinson take edge curial overruled modifieds objections to these findings and agreed that crag violated his ethical duties and handling the robinson tapes this petition before us today contends that the district court clearly erred clearly erred in reaching this conclusion because an objective lee reasonable attorney would have concluded that the documents were not privileged based on the circumstances in this case the district court however properly and reasonably based on substantial evidence in the record concluded that attorney krag violated his ethical duties so it's important to go through the circumstances of what mr cragg knew and what he did to understand the difference pollutions first he obtained recordings that were made by his client lopez of ms robinson those tapes are private provided to him in two thousand and thirteen at least some of them in two thousand and thirteen and then transcribed craig knew that robinson was the general counsel for source america craig also knew who the individuals were that were identified in the complaint now this is contrary to the petition which at pages twenty three twenty one specifically states that prior to two thousand and fifteen nothing in the record establishes that craig had knowledge of the predicate facts necessary to understand who the individuals were in this conversations their respective roles and the context of their conversations that is directly belied by their first american plane which was filed a year earlier which identified all of the individuals that were listed in those transcripts by name and by role so mr cragg as of twenty fourteen knew the corporate structure of this of this entity and knew that the general counsel was revealing to lopez conversation that they were that she was having with the board of directors and of the officers of source america and did mr craig know that source america had placed any limitations not have authority to disclose any attorney client communications the specifics that you referenced in terms of the non disclosure agreement and other factors were not included in that letter and were revealed later i believe after the first time in the opposition to the motion to dismiss so it seems to me and i mean could you take me through the apparent authority analysis because it seems that at the time that general counsel in chief compliance officer robinson made those disclosures of what appears to now be and would probably then was attorney client privilege communications to bona fide c e o mr lopez why didn't she have the apparent authority to do that and that's why it wasn't that a waiver of  pratt was put on notice that this information pursuant to source america was confidential and privileged and that the general counsel had no obligation i had no right to disclose this information the the response in the only effort in terms of the meet confer requirement was i think the question of a privilege and a defense to it such as waiver is not at all within the discretion of the attorney reviewing that information the rules and state farm and rico specifically say that if there's a question we need to talk to the court so why should i get it and i think that mr craig made many of them he may have learned that there's better ways to approach this but my question simply is why wasn't there a waiver of the attorney client privilege under the doctrine of a parent authority when the general counsel of a corporation divulge his attorney client privilege information to mr lopez the president of bona fide but the reason why there wasn't a waiver was because all th facts that are mentioned in discussed in the district court's order were presented they weren't discussed so there can't way there's very factual specific and you have to have all the facts in order to make that analysis we know based on that the general counsel didn't have the authority to to waive the privilege because i subject to a non disclosure i totally get she didn't have the actual authority i just want to know what's the reason why she didn't have the apparent authority for  the same reasons she had no ability on behalf of the company to assert that privilege so in order to do the analysis of an apparent authority you need to know all the facts and if you don't have all the facts then you simply cannot get to that that's what  i'm saying was it squarely presented that all the facts the parties prop whatever facts they had forward ask the court to decide there's no actual thorny there's no apparent authority each side having briefed the factual record and the law that you're relying on was that done in about why when i read the magistrate's report recommendation of the district judge's opinion i see that the two discussing that there was no waiver based upon the earlier settlement agreement there is no waiver based upon a subject matter waiver of disclosure to the u attorney but i didn't see any discussion of why the doctrine of apparent authority doesn't mean doesn't yield the conclusion that there was a waiver at the time of disclosure from robinson  opus if you go to e r page fifteen which is the district court's order there's a discussion and it in the first paragraph under section two on that page that discusses of the facts why there was no authority what i read on that page and i think of was that robinson didn't have the actual authority from the corporation she was under a non disclosure agreement they previously had voted a no confidence vote for stuff like that but none of that would have been made a parent to lopez at the time of their conversation and the company source america held out robinson as their general counsel our highest ranking legal officer so under a doctrine of apparently not actual but apparent authority what was lopez to know here's lopez being told all these things from source america's general counsel why isn't that a waiver under the doctor of apparent authority not actual  and was that discussed by the courts below and if not why not if you know with respect to what lopez should know or should have known in those same transcripts you have the general counsel telling  shouldn't be giving this information i'm going to change this fax so we'll know who it's coming from you should destroy this that so there's plenty of information to know that lopez was aware and should have been aware that she didn't have the authority do what she was doing she said something to the effect enough it does go through that analysis of what she was saying to have as with an explanation the record as to why she was discussing these other matters in terms of why she was discussing it information and she had no authority to do so and going to whether or not in terms of the actual versus apparent authority i can't sit here as i in thinking back in terms of the motions whether or not the issue of  thirteen says that he reached the conclusion that none of the robin stated robinson tapes or transcripts contain source america's privileged or confidential information because ms robinson voluntarily disclose any such information information to mr lopez and she apparently had the authority to make such disclosures very virtue of her position with source america and her monitoring and reporting duties of the settlement agreement now that the concept behind state say fund and rico is that if you're going to reach a conclusion as the attorney that there is a waiver or no parent authority those are all defenses to privilege and that is something that the attorney shouldn't uta latterly be doing that it should be something that should have been brought ultimately the district court disagreed with his conclusions that there was a privilege or a waiver and concluded that there wasn't and so now we have attorney krag has had privileged information in his possession he should have known about it all way back to two thousand and thirteen fourteen fifteen when he's constantly reminded of this information and it's at least some portion of the disqualification based on the district court's objective of punishing mr craig at least believe it's a it's a prophylactic measure and the district court specifically goes through the analysis with respect to the reasons why it's prophylactic and the district court realized that craig had this information in his possession for over two years real prophylactic is designed to prevent some harm from occurring what exactly is the harm that would have occurred or was likely to occur but for disqualification ultimately the harm that is going to be prevented from occurring is that crime who's the attorney who's had this information has has repeatedly been found to have violated the ethical obligations in terms of meaning and conferring and coming forward to the task what's the future what's the future harm that the order prevents the future harm is that it preserves the integrity of the judicial system if you have a situation where an attorney is repeatedly violating the ethical rules and  so there's no argument that this information that's now in his head he could actually somehow use in this litigation no no absolutely well that's ok so there is some harm to the time to be prevented namely that mr cragg can use the information from the transcripts from the pending litigation right correct can you tell me how without revealing any privileged information and tell you how  specific you know it's confidential information so it's hard to get into the details of it but the there's a discussion that the advice has been given by by general counsel to source american handling different matters and whether or not that's going to let me come up in terms of credibility in peach meant or other areas of testimony this could be used and there's a real potential that it could be is that this report's finding that you can't unring the knowledge and that there is as the district court put  the potential that modified may use privilege information directly or indirectly is that sufficient or did the district court need to kind of delve into the details and make more specific finding us to how the information will likely be used i think that information is sufficient you are and in addition to that the district court also talks about the fact that this is necessary to preserve the integrity of the just the judicial system that it will affect the outcome of the proceedings correct but that might my my point is that the the information on these tapes has already been used in and that's going to be evidence as to future uses to these tapes it's  near impossible to predict how the excerpts sitting here at the beginning stage of the litigation may ultimately be used but that knowledge was all within craig's possession for two years and can never be removed in error and learn from them is there a difference though between one of the when the trial judge says there's a possibility it will be used first the group cory's requirement that there be a genuine likelihood of use is not a meaningful difference i think that set or set forth there and and ultimately this has led to the production of these documents on until wiki leaks regardless of who sent them there that those transcripts which were the transcripts that were created by greg are on and you can't condone or allow that type of actions to occur and then to say that there's no damage to source america because this information is not is not there are punishing him for the possibility that this information is going to be used again because he's the one with the knowledge of it assuming that the disqualification stands mr greg craig is disqualified new attorney comes in will come a new attorney the new attorney is getting ready to cross examined some folks from source america and can that new attorney go into wiki leaks and listen to what's out in the public domain and use that information in his or her head to terms of the number of transcripts that existed at the time and twenty fifteen a comment was made that there is no idea why the source america didn't bring up these other transfers at that time the reason is because they never told us that they existed and that's you can look at the magistrate's order he said that the court neither the court nor source america was ever on notice that any other transcripts existed but now they're trying to say that we didn't preserve our rights with respect to these other transcripts ultimately all of this information that has been put out there is because of effort you know we can all be drawn back to the you know so we just recently saying that the new attorney and the new attorney staff can't go listen to publicly available information to plan their trial strategy and examinations i think that there would be some some questions about that and we would we were sent a letter saying you know this information may be publicly available but it's contains attorney client information and if we suspect that you're using it then that's going to cause some serious you know you know issues that w i don't know your honor that might be a way you probably could very perform a different function the district court had said that there were actually two portions of that one is were there ethical to defend the person actually engage in propriety and then the other parties or avoid the appearance of impropriety we know here based on all of that the are only doesn't it from my perspective it doesn't it doesn't matter i think that the magistrate judge the difficultly analysis with respect to federal law the district court judge did the complete analysis with respect to california law and they both came to the same conclusion that the documents district judges ability to disqualify an attorney going forward in a pending case i am confident that california law does apply dealing with disqualification you look to california law  a and a trust claim because certainly then we look to federal law on privilege but that's nice knowing that if we start a federal claim and we want to talk about whether the district judge and under what circumstances can disqualify an attorney from continuing to appear in pending litigation and you still look to state law i think that point we would have the federal claims that were based on a federal subject matter jurisdiction so i think you would first have to look to federal law and that in that his client's interests but also to respect the legitimate interests of the fellow members of his bar the judiciary in the ministry of shit the administration of justice and state funds holds that attorneys have a reasonable standard of care here there's substantial evidence that  tiger actually applies the correct rigaud standard in a case that is factually distinct because the e mail in that case was specific of the rico standard and a case involving an e mail that was alleged to have been privileged and the court found that although the e mail was found to be privileged and was used in by the council in the case in connection with motions it was not inadvertent there was no reasonable likelihood that that counsel could have determined that that e mail was inadvertent here we have ms rob ts robinson who is not only general counsel she's a vice president she's communicating voluntarily to mr lopez a putting aside the issue of apparent authority and waiver in terms of the ethical mr craig had a right to assume and october two thousand and fourteen the field declaration doesn't even show up until the end of two thousand and six and sometimes doesn't sixteen or fifteen i should say if we cannot apply the field decoration to mr craig's review of of a nonspecific demand letter in two thousand and fourteen and his response is appropriate that's what mourners do you get a letter saying i think you've got my conference information the response typically is can you be more specific  general counsel discloses privileged information you get a contact from counsel opposing counsel indicating that wait a minute i think my general counsel disclose privilege information in your responses no i don't have privilege i'm relying on the parent authority and position of general counsel but in this particular case this would make a difference that there's a two year history as the district court pointed out during which time counsel was put the court is untouchable and what the court should have looked at is the fact is mr craig engaged in any impermissible use of excessive review or improper use of the information that was excerpts by mr craig in this case period aerojet is a good case in california aerojet was a case where the lawyer got a bunch of documents some were privileged but the largest covered in one document the name of