Zerlene Rico v Mitsubishi Motors Corp., ___ Cal. Rptr.3d ___, 2007 WL 4335934 (Cal. Sup. Ct. 2007)  

Brief Summary
The California Supreme Court held that a lawyer in receipt of inadvertently produced work product in the form of a strategy memo should have stopped reading the document as soon as he realized it was probably privileged. His failure to do so and subsequent use of the memo in preparing his case and his experts justified disqualification of the lawyer and the experts.

Complete Summary
Plaintiffs brought a personal injury action against the corporate entities comprising Mitsubishi Motors (collectively “Mitsubishi”) as a result of a rollover accident. Counsel for defendants met with their client representatives and experts in order to discuss litigation strategy and vulnerabilities. The meeting was memorialized by a typewritten narrative summary for which only one copy existed. That document was in the possession of defense counsel at a deposition of one of plaintiff’s experts and somehow came to be in the hands of plaintiff’s counsel before the end of the day. Plaintiff’s counsel reviewed the document and later testified that within a couple of minutes, he knew that it was unintentionally produced and that it contained “powerful impeachment evidence”. Id. at *2.

Plaintiff's counsel did not disclose to defense counsel that he was in possession of the document. Instead, he studied it, provided copies to his co-counsel and experts, and used it to his advantage at the deposition of a defense expert.

The California Supreme Court confirmed California’s rejection of the ABA approach to inadvertently produced documents and held that once an attorney receives materials that are obviously subject to a privilege, under circumstances in which it is reasonably apparent that they were provided inadvertently, the attorney must not only notify the sender of the document immediately but must also refrain from further examining or using the document. From there, the parties can evaluate and, if necessary, litigate the proper disposition of the document. The court further held that this rule, first announced in State Comp. Ins. Fund v. WPS, Inc. 70 Cal.App. 4th 644 (1999) as to documents covered by the attorney-client privilege, is properly extended to records covered by the work product doctrine.

The court also discussed identification of the document as privileged and noted that, although the document in question was not labeled “confidential” or otherwise demarcated as privileged, it was obvious to plaintiff’s counsel that the document was confidential. Application of the inadvertent production rules to a particular document is an objective standard turning on whether “reasonably competent counsel, knowing the circumstances of litigation, would have concluded the materials were privileged”. 2007 WL 4335934 at *7, citing Fund supra 70 Cal.App. 4th at 656-657.

In affirming the disqualification of counsel and his experts, the Court noted that “mere exposure” to confidences would likely be insufficient to merit disqualification but that the study and dissemination of copies of the document required such a remedy.

Significance of the Opinion
This opinion confirms that in California, as in a number of other states, lawyers and their clients who, without court approval, seek advantage from the review and use of inadvertently produced documents act at significant risk of peril.

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