California Supreme Court Holds Legal Invoices Are Privileged
In a much-anticipated ruling, the California Supreme Court held on December 29, 2016 that legal invoices are protected by the attorney-client privilege, and therefore, with some exceptions, need not be disclosed under the Public Records Act. (Los Angeles County Board of Supervisors v. Superior Court (Dec. 29, 2016) 2016 WL 7473802.) Both the primary ruling that the invoices are privileged, and the exceptions noted by the Court, are significant to public agencies in California.
California law recognizes certain privileges that protect documents and communications from disclosure to third parties. The attorney-client privilege, which protects the confidential relationship between clients and attorneys, "has been a hallmark of Anglo-American jurisprudence for almost 400 years." (Mitchell v. Superior Court (1984) 37 Cal.3d 591, 599.) Section 950 of the California Evidence Code describes the privilege.
The California Public Records Act (Government Code § 6250 et seq.) guarantees the public a right of access to government information by requiring public agencies to disclose records in the agencies’ possession. The PRA broadly defines "public records" to include "any writing containing information relating to the conduct of the public’s business prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics." (Government Code § 6252(e).)
At the same time, the PRA describes various exceptions to the public access requirement, one of which incorporates the attorney-client privilege and other privileges recognized by law. (Government Code § 6254(k).) The California Supreme Court has recognized that the attorney-client privilege applies to public entities, and that this provision of the PRA makes "the attorney-client privilege applicable to public records." (Roberts v. City of Palmdale (1993) 5 Cal.4th 363, 370.)
Whether and to what extent the privilege applies to invoices for legal services has been uncertain. Many public agencies receive requests under the PRA for legal invoices for a variety of reasons, most often to ascertain the agencies’ total legal expenditures or expenditures to a specific firm or on a specific matter. Legal bills are undeniably public records as defined in the PRA; they indicate the expenditure of public funds, which is a topic of interest to the public. However, they often contain confidential information about the status of legal matters, time spent by attorneys on various tasks, and the identities of people with whom the attorneys communicate, among other confidential items.
Facts of the Case
In July 2013, the American Civil Liberties Union of Southern California submitted a PRA request to the Los Angeles County Board
of Supervisors seeking invoices specifying the amounts the County had been billed by law firms in connection with nine lawsuits alleging excessive force against jail inmates. The County agreed to produce copies of invoices related to three of the lawsuits that were no longer pending, with privileged information redacted from the copies. The other six lawsuits were still pending, and the County contended the information in the law firms’ invoices for those lawsuits was privileged and therefore exempt from disclosure under section 6254(k) of the PRA. The County also withheld those invoices under the PRA’s "catchall" exception in Government Code section 6255, which permits a public agency to withhold records when "the public interest served by not disclosing the record clearly outweighs the public interest served by disclosure of the record."
The ACLU filed a petition for writ of mandate in superior court to compel the County to disclose the invoices for all nine lawsuits. The superior court ordered the County to release the documents but permitted redaction "[t]o the extent these documents reflect an attorney’s legal opinion or advice, or reveal an attorney’s mental impressions or theories of the case." The County appealed, and the Court of Appeal vacated the superior court’s order, holding the invoices were "transmissions" made in confidence from attorney to client and therefore privileged. The ACLU appealed to the California Supreme Court, which granted review.
The Supreme Court’s Decision
The Supreme Court’s decision required interpretation of the PRA and Evidence Code provisions relating to privilege. Evidence Code section 952 defines "confidential communication between client and lawyer" as "information transmitted between a client and his or her lawyer in the course of that relationship and in confidence." The ACLU argued that invoices are meant to help a service provider secure payment for services rendered—a separate business purpose that is "incidental to the attorney-client relationship." The Court agreed, "but only up to a point."
The Court reiterated a longstanding principle that the privilege "does not apply to every single communication transmitted confidentially between lawyer and client." But "the heartland of the privilege" protects communications that bear some relationship to the attorney’s provision of legal consultation. Although an invoice is not communicated for the purpose of legal consultation, the information in certain invoices may be within the scope of the privilege.
Billing information conveyed to inform the client of the nature or amount of work occurring on a pending legal issue would lie in the "heartland" of the privilege. Even more general information such as the total amount spent on a matter during a given period "may come close enough to this heartland to threaten the confidentiality of information directly relevant to the attorney’s distinctive professional role." The Court held the attorney-client privilege protects the confidentiality of information in both of those categories. In a pending matter, for example, an invoice that shows a sudden uptick in spending may reveal investigative efforts or trial strategy, and "swings in spending" could reveal an impending action or significant concern.
By contrast, a cumulative fee total for a long-completed matter "may communicate little or nothing about the substance of legal consultation." As opposed to invoices about active matters, "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 articulated a two-part rule to apply when a public agency’s legal invoices are sought under the PRA:
1. When a legal matter remains pending and active, the privilege encompasses everything in an invoice, including the amount of aggregate fees.
2. Fee totals in legal matters that concluded long ago may not be privileged.
The first rule is extremely helpful to public agencies, as it clarifies the absolutely privileged nature of legal invoices for any current (or recently concluded) matter. Even the total on the invoice, without any further information, is privileged and not subject to disclosure under the PRA.
The second rule is less clear. Information other than fees, such as references to an attorney’s recommendations, mental processes, or strategy, apparently remains privileged for all time. The bare fee total, however, at some point may no longer be privileged. The Court was careful not to suggest an "expiration date" for the privilege, leaving attorneys and clients to determine on a case-by-case basis whether the information in an invoice involving a long-closed matter remains privileged. (The absence of a bright line may engender considerably more PRA litigation.)
Justice Werdegar dissented, accusing the Court majority of undermining a "pillar of our jurisprudence" by suggesting the attorney-client privilege "somehow wanes with the termination of the subject litigation."
Effect on Public Educational Agencies
Public agencies must promptly review and respond to requests for records under the PRA, even when the request seeks nondisclosable records. Under this Supreme Court decision, one rule is straightforward—invoices for legal work on pending matters are not disclosable under the PRA. PRA requests for legal invoices should be referred to counsel to determine whether and to what extent the privilege applies.