California Supreme Court Rules Factual Summary in Opinion Letter Was Privileged

An opinion letter sent by outside counsel to a corporate client is protected by the attorney-client privilege, irrespective of the letter’s content, the California Supreme Court clarified yesterday. The unanimous panel ruled that Los Angeles Superior Court Judge Emilie H. Elias erred by directing a referee to conduct an in camera review of a 22-page letter by Los Angeles attorney Kelly Hensley allowing the referee to redact the letter to conceal the portions the referee believed to be privileged, and ordering the client to disclose the remainder to the opposing party. Costco Wholesale Corporation retained Hensley’s firm—Sheppard, Mullin, Richter & Hampton—in 2000 to provide legal advice regarding whether certain Costco warehouse managers in California were exempt from California’s wage and overtime laws. Several years later, various Costco employees filed a class action against their employer, claiming Costco had misclassified some of its managers as “exempt” employees and therefore had failed to pay them required overtime wages.

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