Judge: Deborah C. Servino, Case: 30-2018-00993688, Date: 2022-09-16 Tentative Ruling

Plaintiffs Blue Cross of California and Anthem Blue Cross Life and Health Insurance Company’s motion to reopen discovery on a limited basis and compel discovery, or alternatively, for issue sanctions precluding Defendants from asserting an  “advice of counsel” defense, is denied.

“On motion of any party, the court may grant leave to complete discovery proceedings, or to have a motion concerning discovery heard, closer to the initial trial date, or to reopen discovery after a new trial date has been set.” (Code Civ. Proc., § 2024.050, subd. (a).)

Plaintiffs contend they are entitled to an order deeming the attorney-client privilege waived and reopening discovery on a limited basis to take discovery “related to any purported advice Defendants received from counsel regarding their submission of claims to Plaintiffs.” Plaintiffs claim that the Equaltox Defendants, in opposing Plaintiffs’ motions in limine nos. 1, 3, 4, and 8, purportedly raised an advice of counsel defense in the oppositions. Specifically, the following statement was made in each of the oppositions at issue: “Out of options, Equaltox began billing its claims through its Medical Director, Dr. Cranford Scott, because it honestly believed, based on consultation with others in the industry and legal counsel, that it could properly bill the lab testing it was performing for Anthem’s insureds in this manner.”

“The attorney-client privilege seeks to protect the conversations and communications between the attorney and client, not merely the conclusions developed by those conversations or the fact that such conversations occurred.” (Southern Cal. Gas Co. v. Public Utilities Com. (1990) 50 Cal.3d 31, 49.) “Generally, implied waivers are limited to situations where the client has placed into issue the decisions, conclusions, and mental state of the attorney who will be called as a witness to prove such matters.” (Transamerica Title Ins. Co. v. Superior Court (1987) 188 Cal.App.3d 1047, 1053.) Likewise, the privilege is not waived if the defendant “is not defending itself on the basis of the advice it received.” Rather, it is “the deliberate injection of the advice of counsel into a case [that] waives the attorney-client privilege as to communications and documents relating to the advice.” (Ibid.)   “[C]ases have declined to find a waiver of the attorney-client privilege where the substance of the protected communication is not itself tendered in issue, but instead simply represents one of several forms of indirect evidence in the matter.”  (Mitchell v. Superior Court (1984) 37 Cal.3d 591, 606.)

Here, Plaintiffs acknowledge that Defendants have expressly disavowed relying on an advice of counsel defense. (See Reply, at pp. 2-3.) Plaintiffs also acknowledge that Defendants have never expressly stated they intend to raise an advice of counsel defense, whether in opposing this motion or in other documents. (See Reply, at p. 2.) The arguments in Equaltox’s oppositions to Plaintiffs’ motions in limine do not reflect a deliberate injection of the advice of counsel upon which Defendants’ denial of liability is based. They do not put the state of mind of legal counsel at issue, or legal counsel’s advice.

Defendants have not raised an advice of counsel defense. (See Southern Cal. Gas Co. v. Public Utilities Com., supra, 50 Cal.3d at p. 42 [“Because its attorneys' advice or state of mind is not in issue, it has not impliedly waived its attorney-client privilege.”]; Aetna Casualty & Surety Co. v. Superior Court (1984) 153 Cal.App.3d 467, 475 [“Stated differently, Aetna claims it acted as it did not because it was advised to do so, but because the advice was, in its view, correct; and it is prepared to defend itself on the basis of that asserted correctness rather than the mere fact of the advice. Such a defense does not waive the attorney-client privilege.”].)

Plaintiffs’ alternative request for an issue sanction is also denied. The record does not reflect any misuse of the discovery process by Defendants that warrants a severe sanction.  Plaintiffs have not shown that Defendants violated a prior discovery order. (Code Civ. Proc., § 2023.030; see (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2022) ¶ 8:2145.)

Defendant A&K Billing, LLC shall give notice of the ruling.