Judge: Joel L. Lofton, Case: 21GDCV00387, Date: 2023-05-01 Tentative Ruling

Case Number: 21GDCV00387    Hearing Date: May 1, 2023    Dept: X

   Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE:     May 1, 2023                            TRIAL DATE: January 23, 2024

CASE:                         STEPHEN HE v. MEGA BANK, a California Corporation, EDWARD LO, an individual, WILSON NGAI, an individual, and DOES 1 – 90, inclusive. 

CASE NO.:                 21GDCV00387

MOTION FOR A PROTECTIVE ORDER

MOVING PARTY:               Defendant Mega Bank

RESPONDING PARTY:      Plaintiff Stephen He

SERVICE:                              Filed March 15, 2023

OPPOSITION:                       Filed April 17, 2023

REPLY:                                   Filed April 24, 2023

RELIEF REQUESTED

            Defendant moves for a protective order regarding an email it claims is protected by attorney-client privilege.

BACKGROUND

             This case arises out of Plaintiff Stephen He’s (“Plaintiff”) claims that Defendants Mega Bank (“Mega”), Edward Lo (“Lo”), and Wilson Ngai (“Ngai”) (collectively “Defendants”) pressured Plaintiff and made promises to recruit him to work at Mega, failed to fulfill those promises, and improperly terminated Plaintiff’s employment at Mega. Plaintiff filed a first amended complaint (“FAC”) on November 22, 2021, alleging seven causes of action for (1) intentional interference with prospective economic advantage, (2) negligent interference with prospective economic advantage, (3) unfair business practices, (4) breach of oral contract, (5) fraud and misrepresentation, (6) promissory estoppel, and (7) employment discrimination based on age. The court previously sustained Defendants’ demurrer to Plaintiff’s fifth cause of action.

TENTATIVE RULING

            Defendant’s motion for a protective order is GRANTED.

LEGAL STANDARD

            “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....’ ” (Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 732.) “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. [Citations.] Once that party establishes facts necessary to support a prima facie claim of privilege, the communication is presumed to have 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.” (Id. at p. 733.)

DISCUSSION

            Attorney-Client Privilege

            Defendant moves for a protective order preventing Plaintiff from using an email from Julian Fong, its President and CEO, dated April 20, 2021. Defendant brings this motion on the basis that the email is protected by the attorney-client privilege. “ ‘[I]t is settled that a corporate client ... can claim the privilege.’ ” (Edwards Wildman Palmer LLP v. Superior Court (2014) 231 Cal.App.4th 1214, 1225.) The correspondence at issue in this present motion was not directly between a client and an attorney. Rather, the email was sent by Fong to Defendant’s board of directors and contains language pertaining to Defendant's legal strategy in defense of the present action.

            “As a general matter, the power to assert and waive the attorney-client privilege held by a corporation belongs to corporate management and is normally exercised by the corporation's officers and directors.” (Melendrez v. Superior Court (2013) 215 Cal.App.4th 1343, 1353-54.)

            “It follows that in order to implement the advice of lawyers, the advice must be communicated to others within the corporation. It is neither practical nor efficient to require that every corporate employee charged with implementing legal advice given by counsel for the corporation must directly meet with counsel or see verbatim excerpts of the legal advice given.” (Zurich American Ins. Co. v. Superior Court (2007) 155 Cal.App.4th 1485, 1498.) The Court in Zurich stated that the first relevant inquiry as to whether a document is privileged is “whether the document contains a discussion of legal advice or strategy of counsel”. (Id. at p. 1503.)

            In the email at issue, Fong recites part of Defendant’s counsel’s strategy to the board of directors. The email also contains a summary of Defendant’s counsel’s legal opinion. Thus, the email is privileged.

            In opposition, Plaintiff argues that the email also contains factual statements surrounding Plaintiff’s employment and termination at Defendant. Plaintiff’s argument is essentially that because the document at issue contains non-privileged communications, the document itself is not covered by the attorney-client privilege. Plaintiff’s argument fails.

            “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. . . . ‘[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.’ ” (Costco, supra, 47 Cal.4th at p. 734.)

            Plaintiff cites no authority for his position that the email’s inclusion of non-privileged information means that the email is not a privileged document. Also, the rule stated by the California Supreme Court in Costco, supra, 47 Cal.4th at p. 734, refutes Plaintiff’s assertion.

            Next, the Court in Zurich, supra, 155 Cal.App.4th at p. 1503, stated that the trial court must determine whether the party “waived the privilege by distributing the advice within the corporation” using Evidence Code section 952 as guidance.

            Evidence Code section 952, provides: “ ‘confidential communication between client and lawyer’ means information transmitted between a client and his or her lawyer in the course of that 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, and includes a legal opinion formed and the advice given by the lawyer in the course of that relationship.”

            “The key concept here is need to know. While involvement of an unnecessary third person in attorney-client communications destroys confidentiality, involvement of third persons to whom disclosure is reasonably necessary to further the purpose of the legal consultation preserves confidentiality of communication.” (Insurance Co. of North America v. Superior Court (1980) 108 Cal.App.3d 758, 765.)

            Plaintiff argues that Defendant, through Fong’s actions, waived its privilege by sending the information through email when other more secure means should have been employed. Further, Plaintiff argues that Fong sent the email to a member of the board of directors at the director’s work email for an unrelated company.

            Plaintiff’s arguments demonstrate that Fong may have taken more prudent steps to ensure the confidentiality of the documents, but Plaintiff fails to establish that Defendant waived its privilege. Evidence Code section 952 defines confidential communications as being transmitted “by a means which, so far as the client is aware, discloses the information to no third persons” other than those reasonably necessary. It appears that Plaintiff obtained the declaration through Stephen Lu, a former director on the Defendant’s board. (Rasmussen Decl. ¶¶ 2 and 5.) The email was sent to the board of directors and contained language stressing the importance of keeping the information confidential. Further, simply because more protective means existed to transmit the email does not mean that Defendant waived its privilege. Thus, Plaintiff has not demonstrated that the email was transmitted in a means that waives privilege.

            Plaintiff also argues that Defendant waived its privilege of the email by failing to disclose its existence in discovery or through a privilege log. However, “a responding party preserves its objections based on the attorney-client privilege and work product doctrine by serving a timely written response asserting those objections. It is irrelevant that the objections are asserted as part of a generic or boilerplate response, or that the responding party failed to serve a timely and proper privilege log. Once the objections are timely asserted, the trial court may not deem them waived based on any deficiency in the response or privilege log. (Catalina Island Yacht Club v. Superior Court (2015) 242 Cal.App.4th 1116, 1129.) Plaintiff’s arguments here fail.

            Lastly, Plaintiff argues that Defendant waived its privilege by failing to object to Lu’s references to the contents of the email in his declarations in support of Plaintiff’s opposition to Defendants’ motions for summary judgment. Plaintiff cites no authority for this position. Plaintiff’s arguments are rejected.

            Plaintiff has failed to establish that Defendant waived its privilege.

            Protective Order

            Defendant seeks a protective order prohibiting Plaintiff from using the email during depositions and in this litigation. Plaintiff also seeks an order requiring Plaintiff’s counsel to return all attorney-client privileged documents and destroying all electronic versions of privileged documents.

“Before, during, or after a deposition, any party, any deponent, or any other affected natural person or organization may promptly move for a protective order.” (Code Civ. Proc. section 2025.420, subd. (a).) “The court, for good cause shown, may make any order that justice requires to protect any party, deponent, or other natural person or organization from unwarranted annoyance, embarrassment, or oppression, or undue burden and expense.” (Code Civ. Proc. section 2025.420, subd. (b).)

CONCLUSION

            Defendant’s motion for a protective order is GRANTED.  Plaintiff is prohibited from using the email during depositions or any other part of litigation related to this case.  Plaintiff is also ordered to immediately inform Defendants if they are in possession of any other confidential communications as defined in this ruling.

            Moving Party to give notice.

Dated:   May 1, 2023                                      ___________________________________

                                                                                    Joel L. Lofton

                                                                                    Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court indicating their

intention to submit.  Parties intending to appear are strongly encouraged to appear remotely.  alhdeptx@lacourt.org