Despite Release, Lawyer |Docs Remain Privileged

LOS ANGELES (CN) - Privileged documents released by accident are still privileged and are not granted any exemption under public records laws, the California Supreme Court ruled Thursday.

The unanimous ruling stems from two tax documents released by a Los Angeles city official -inadvertently, according to city attorneys - to a man suing the city over a tax dispute that was settled last year.

In 2007, Estuardo Ardon filed a class-action lawsuit against Los Angeles challenging one of the city's telephone taxes and seeking a tax refund.

Ardon claimed the 10 percent tax was illegal because it had been levied on services not subject to federal tax.

A number of taxpayer and consumer advocacy groups filed amicus briefs in the lawsuit, and several attorney groups and bar associations filed on behalf of Los Angeles.

During discovery, Ardon requested numerous tax documents and business records of the League of California Cities.

Los Angeles provided some of the requested documents, but withheld 27 of them, claiming the documents were privileged under the attorney-work product doctrine.

The California Supreme Court found in 2008 that the disputed documents were, in fact, privileged.

Los Angeles would settle the case in 2015 and refund $92 million of the taxes to citizens, a fraction of the hundreds of millions it could have been made to pay if Ardon had won out in court.

However, the case was revived just before settlement on the issue of the privileged documents.

In 2013, Ardon again requested related documents via his attorney. A city official granted the request and inadvertently released two of the 27 privileged documents: a 2006 memo from the League's legal department and a memo from the Los Angeles administrative officer to the city's attorney.

When the city found out, it contacted Ardon's attorney, Rachele Rickert, requesting he return the documents.

Rickert refused, arguing that the city waived its privileges by disclosing the documents, even if it was by mistake, and that the state's public records laws had no explicit exemption for inadvertent disclosure.

The city appealed, and the case again went to state's Supreme Court.

In Thursday's opinion, the court ruled that attorney-work product privilege is in the public interest and should be protected, even in cases of inadvertent disclosure, citing a 1999 state appeals court decision in which a plaintiff's attorney mistakenly provided privileged documents to the defense attorney.

The Supreme Court ruled 7-0 that no matter if an attorney or the attorney's client mistakenly released privileged documents, the documents themselves remain privileged.

"In light of the fact that human error is as likely to occur in the process of responding to a Public Records Act request as to a discovery request, there appears to be no reason why inadvertent disclosures should be treated differently," Justice Ming Chin wrote.

Chin did not castigate Rickert for requesting the documents, but for refusing to release them.

"The question is not whether counsel should have used the Public Records Act in this way," the judge wrote. "The question is what she should have done after receiving what appeared to be privileged documents."

Rickert, who is with Wolf Haldenstein, did not immediately respond to emailed request for comment.

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