Judge Gail Killefer, Case BC20861 2023-01-23 Tentative Ruling

Relief Requested: Motion for Judicial Determination of Privilege in the Context of Crime/Fraud Exception. (CCP § 2031.285(d)(1) and Evid. Code § 956.)

Tentative: Plaintiff’s Motion is denied. The documents at issue are privileged attorney client communications to which the crime fraud exception does not apply.

This action arises from the employment of Yukio Taira (“Plaintiff”) by Honeywell International, Inc. (“Defendant”). Plaintiff was hired by Defendant on or about November 1, 2011, and worked continuously until May 14, 2015, when he suffered a stroke on a commercial flight while on a business trip on behalf of his employer.

Plaintiff filed this complaint on September 6, 2018. Plaintiff’s Third Amended Complaint (“TAC”), filed April 3, 2020, alleges two causes of action under the Fair Employment and Housing Act (FEHA) against Defendant: 1) a violation of Government Code § 12940(m) (failing to make a reasonable accommodation for the known physical or mental disability of Plaintiff); and 2) a violation of Government Code § 12940(n) (Defendant’s failure to engage in a timely good-faith interactive process with plaintiff to determine an effective reasonable accommodation).

The court approved and filed the parties’ Stipulation and Protective Order on August 31, 2022. Pursuant to the Protective Order and CCP § 2031.285(d)(1), Defendant sought to “clawback” certain documents produced on October 13, 2022, in connection with the deposition of employee Lynn Libertore. At the deposition on October 18, 2022, defense counsel raised the issue that certain documents had been produced inadvertently. On October 21, 2018, defense counsel sent plaintiff’s counsel a letter identifying specific documents for which defendant raised a claim of privilege. On November 15, 2022, plaintiff’s counsel responded that certain documents would be returned pursuant to CCP § 2031.285. The disputed documents involve a March 12-13, 2015, e-mail chain/thread related to the exempt or nonexempt status of employees with respect to the Fair Labor Standards Act (FLSA), including Plaintiff.[1]

The parties are now before the court on Plaintiff’s Motion for Judicial Determination of Privilege in the Context of Crime/Fraud Exception. (CCP § 2031.285(d)(1) and Evid. Code § 956.) This motion was scheduled for hearing on March 3, 2023. After counsel fully briefed the privilege issue with opening and supplemental briefs in preparation for multiple Informal Discovery Conferences (IDCs), and the court discussed the privilege issue with counsel during the IDCs without reaching a resolution, counsel asked the court to rule on the motion. The court advanced the hearing on Plaintiff’s Motion from March 3, 2023, to January 23, 2023.

Defendants assert the documents in dispute are Bates-labeled HONEYWELL-TAIRA000000565-568 and -000000537-542, and all related privileged emails involving Defendant’s in-house counsel Elizabeth “Betsy” Lawrence, which include: HONEYWELL-TAIRA000000543-545, 000000546-547, 000000549-550, 000000552-553, 000000555-556, 000000558-560, 000000562, and 000000564. (Def. IDC Statement, p.1 n.2.)

Curiously, of these documents, Plaintiff attaches to his motion only HONEYWELL-TAIRA000000565-568 (Exhibit 2), -000000537-542 (Exhibit 9), and -000000555 (Exhibit 4). The pages in exhibit 2 are identical to those in Exhibit 9; identical pages are contained within Exhibit 9. (Motion, 7.) Thus, the court will consider only five pages -- TAIRA000000565-568 (Exhibit 2) and -000000555 (Exhibit 4) -- as the “disputed documents.”[2]

Evidence Code § 954 provides that communications between attorneys and their clients are privileged and confidential. That section provides in relevant part: “[t]he client, whether or not a party, has a privilege to refuse to disclose, and to prevent another from disclosing, a confidential communication between client and lawyer….” (Evid. Code § 954.)

One exception to the attorney-client privilege is the “crime-fraud exception” which is set forth in Evidence Code § 956. Section 956(a) provides: “[t]here is no privilege under this article if the services of the lawyer were sought or obtained to enable or aid anyone to commit or plan to commit a crime or a fraud.”

Plaintiff argues that the crime-fraud exception to the attorney privilege applies to the disputed documents.

Plaintiff asks this court to conduct an in camera review of the disputed documents under CCP § 2031.285(d)(1) to determine whether the crime fraud exception to the attorney client privilege applies. Section 2031.285(d)(1) provides:

if the receiving party contests the legitimacy of a claim of privilege or protection, he or she may seek a determination of the claim from the court by making a motion within 30 days of receiving the claim and presenting the information to the court conditionally under seal.

Defendant opposes Plaintiff’s request and argues that Evid. Code § 915 prohibits this court from reviewing the disputed documents to determine whether their disclosure is required.

The court finds that the circumstances of these documents are governed by CCP § 2031.285. That section provides that the party contesting the legitimacy of the privilege claim may file the contested documents with the court pending a ruling on the application of privilege, as Plaintiff has here. CCP §§ 2031.285(b) and (d)(1) clearly authorize the court to review the documents.

To invoke the Evid. Code § 956 exception to the attorney-client privilege, the proponent must make a prima facie showing that the services of the lawyer "were sought or obtained" to enable or to aid anyone to commit or plan to commit a crime or fraud. (BP Alaska Exploration, Inc. v. Superior Court (1988) 199 Cal.App. 3d 1240.)

The parties agree that the disputed documents “contain legal counsel’s advice regarding the classification of employees as exempt/non-exempt.” (Def. IDC Brief, p.1.) Plaintiff argues that these documents “show and describe a meticulous effort by the most senior Honeywell human resources executives using the aid of senior legal counsel to hide and cover up the mischaracterization of a group of Honeywell employees who were classified as “exempt” employees, when clearly they should have been categorized as “non-exempt.”” (Motion, 3.) According to Plaintiff, at least six employees, including Plaintiff, “were cheated out of their proper wages through misclassification.” (Motion, 4.)

Plaintiff alleges that Defendant committed the crime of wage theft through intentional misclassification of employees and committed fraud against their own employees by stealing wages, lying about it, and attempting to hide evidence of it. During the IDC, Plaintiff’s counsel cited to Labor Code §§ 552 and 553[3] in support of the characterization of the disputed documents as evidence of wage theft.

In response, Defendant argues that the documents are clearly privileged; that a discussion of employee reclassification does not constitute a crime/fraud; and that the documents are not relevant to Plaintiff’s claims. The court agrees.

Here, Plaintiff’s TAC alleges two FEHA causes against Defendant; his reliance on Labor Code §§ 552 and 553 is misplaced. Any claim Plaintiff may have had under the Labor Code is time-barred because that statute requires an employee to file a claim within three years from the date of the most recent violation. (Labor Code § 338.) Plaintiff has provided the court with no authority that supports the argument that counsel’s advice regarding the classification of employees constitutes a crime/fraud.

The court is also not yet persuaded that the alleged misclassification is relevant to Plaintiff’s FEHA claims regarding reasonable accommodation and the interactive process.

The court finds that the disputed documents are privileged attorney client communications to which the crime fraud exception does not apply.

[1] Although Plaintiff initially asserted a second category of documents in dispute -- a February 1, 2016, instant messenger conversation between Lynne Liberatore and Rebecca Conway (Motion, 7) -- Defendant contends that it has never sought the return of these documents. (Def. IDC Statement, 1 n.2.)

[2] Plaintiff’s counsel apparently failed to meet and confer with Defendant’s counsel before filing the motion. (Def. IDC Statement, p.1 n.2.) If the parties had met and conferred, at the very least they may have agreed on which documents were disputed.

[3] Labor Code § 552 provides: “No employer of labor shall cause his employees to work more than six days in seven.” Labor Code § 553 provides: “Any person who violates this chapter is guilty of a misdemeanor.”