Legal Alerts Dec 29, 2016

Legal Invoices to Public Agencies in California May Be Exempt from Disclosure

The California Supreme Court Tackles Public Records vs. Attorney-Client Privilege

Legal Invoices to Public Agencies in California May Be Exempt from Disclosure

In a case that pitted government transparency against a public agency’s interest in confidential communications with its attorney, the California Supreme Court came down on the side of protecting attorney-client privileged communications from public access by way of the Public Records Act. But, just barely… and with reservations, and dissent.
 
In its final decision of 2016 issued today in Los Angeles County Board of Supervisors v. Superior Court (ACLU of Southern California), a rare, sharply divided Court split 4-3 on the issue — but not as one might expect. Earlier this year, the Court came down on the side of attorney-client privilege against a PRA claim (Ardon v. City of Los Angeles).
 
The ACLU case arose from a number of lawsuits alleging excessive force against inmates in the Los Angeles County jail system. The ACLU and a private party made a request under the PRA to the Los Angeles County Board of Supervisors and County Counsel seeking “invoices” specifying the amounts the County was billed by any law firm in connection with nine different lawsuits. The County agreed to produce copies of the invoices from three related lawsuits that were no longer pending, with attorney-client privileged and work product information redacted. But it declined to provide invoices for the other six lawsuits, which were still pending. The County asserted the invoices were exempt from disclosure under the PRA because they contained communications with its counsel that were covered by the attorney-client privilege.
 
The ACLU sued to obtain the records, challenging the County’s claim of exemption under the PRA. The trial court ruled in favor of the ACLU and directed the billing invoices be disclosed. The County successfully appealed. The ACLU then sought review in the Supreme Court.
 
The Court framed the question before it as: “Are invoices for legal services transmitted to a government agency by outside counsel…categorically protected by the attorney-client privilege and therefore exempt from disclosure under the PRA?” The key word being “categorically,” meaning subject to the privilege at all times and in all circumstances. The appellate court had ruled they were categorically covered by the privilege and exempt from disclosure.
 
Writing for a bare four-justice majority, Justice Mariano-Florentino Cuéllar held that the appellate court erred in finding the invoices were categorically privileged and therefore always exempt from disclosure under the PRA. The opinion held that the privilege does not apply to every single communication transmitted confidentially between lawyer and client. Rather, “the heartland of the privilege” protects those communications that bear some relationship to the attorney’s provision of legal consultation, which “includes a legal opinion formed and the advice given by the lawyer in the course of that relationship.”
 
The opinion found that invoices for legal services are generally not communications for the purpose of legal consultation, but simply communications for the purpose of billing the client, therefore falling outside the privilege. However, the opinion did clarify that certain invoices that convey billing information for the purpose of legal representation could be protected by the privilege. For example, to inform the client of the nature or amount of work performed on a pending legal issue. But, the opinion drew a distinction for fee totals in legal matters concluded “long ago,” which would not be protected.
 
Thus, the Court held that, while the scope of the privilege “remains constant over time,” information such as the amount of money that was spent on a case “takes on a different significance if it is revealed during the course of active litigation. During active litigation, that information can threaten the confidentiality of legal consultation by revealing legal strategy. But there may come a point when this very same information no longer communicates anything privileged, because it no longer provides any insight into litigation strategy or legal consultation.”
 
The Court definitively detailed the level of protection afforded to legal invoices during the pendency of an action, stating that: “[w]hen a legal matter remains pending and active, the privilege encompasses everything in an invoice, including the amount of aggregate fees. This is because, even though the amount of money paid for legal services is generally not privileged, an invoice that shows a sudden uptick in spending ― might very well reveal much of [a government agency]’s investigative efforts and trial strategy.” (Emphasis added.)
 
The Court reversed the appellate court and sent the case back to it for further proceedings consistent with the opinion — meaning the parties and appellate court will have to sort out what part and which of the billings are privileged or not.
 
Thus, in the end, the decision was more about the attorney-client privilege than the PRA. And that is where the three dissenting justices, in a stinging opinion authored by Justice Kathryn M. Werdegar, joined by Chief Justice Tani Gorre Cantil-Sakauye and Justice Carol A. Corrigan, disagreed with the majority. The dissent argued that, by so limiting the scope of the attorney-client privilege, “the majority of the Court undermines this pillar of our jurisprudence.” The dissenting opinion rejected the notion that the privilege can exist at one point in time, and then, like the Cheshire Cat’s smile, simply disappear.
 
If you have questions about this opinion or how it will affect your municipality or agency, please contact the attorney authors of this legal alert listed at right in the firm’s Government Policy & Public Integrity practice group or your BB&K attorney.

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