Chapter 11.

Exceptions to the Attorney-Client Privilege 1

Table of Contents
I. THE LAWYER-CLIENT BREACH OF DUTY ("SELF-DEFENSE") EXCEPTION................................................. 1
1. Breach of Duty By Client .................................................................................................................. 2
2. Breach of Duty By Lawyer ................................................................................................................ 2
II. THE CRIME-FRAUD EXCEPTION .............................................................................................................. 3
1. Conduct Triggering the Crime-Fraud Exception............................................................................... 3
2. Procedures to Evaluate Application of the Crime-Fraud Exception ................................................ 3
III. THE "DEATH OR SUBSTANTIAL BODILY HARM" EXCEPTION .................................................................. 4
IV. THE SHARED INFORMATION EXCEPTION ............................................................................................... 4
1. Joint Clients Exception ..................................................................................................................... 4
a. Joint Clients in Insurance Cases ................................................................................................. 5
2. Joint Defense, Common Interest, or Pooled Information ............................................................... 5
V. THE TESTAMENTARY EXCEPTIONS ......................................................................................................... 6
VI. THE FIDUCIARY EXCEPTION .................................................................................................................... 6
VII. THE DERIVATIVE SUIT EXCEPTION .......................................................................................................... 7
VIII. WAIVER OF THE PRIVILEGE..................................................................................................................... 8
1. Express Waiver ................................................................................................................................. 9
2. Implied Waiver ................................................................................................................................. 9
a. Limited Waiver (Exception to the policy of Total Waiver) ........................................................ 9
IX. TERMINATION OF THE PRIVILEGE ........................................................................................................ 11
1. The Dead Client Confession Problem............................................................................................. 12
a. Prosecutors and Wrongful Convictions ................................................................................... 12

I. THE LAWYER-CLIENT BREACH OF DUTY ("SELF-DEFENSE")

EXCEPTION
- CA Evidence Code:
o "There is no privilege ... as to a communication relevant to an issue of breach, by
the lawyer or by the client, of a duty arising out of the lawyer-client relationship."
o and also is necessary for the attorney to state his or her case
- ABA MR:
o permits a lawyer to reveal confidential information (1) to establish a claim or
defense in a controversy with the client, (2) to establish a defense to either a
Chapter 11. Exceptions to the Attorney-Client Privilege 2

criminal charge or a civil claim "based upon conduct in which the client was
involved," or (3) to "respond to allegations in any proceeding concerning the
lawyer's representation of the client."

1. Breach of Duty By Client

- In most cases, involves a failure to pay the lawyer's fee
- Some cases involve unethical or illegal client conduct:
o Spratley v. State Farm (Utah)
 Former in-house counsel of State Farm could disclose the insurance
company confidences as reasonably necessary to establish allegations of
wrongful discharge based on State Farm's unethical and tortious
conduct.
 The former counsel could not disclose confidences of the insureds
(policy holders) because they were neither brining a claim against them
nor defending themselves against any claims made by those insureds.
o CA takes the opposite approach
 No lawyers can use confidential information to prove their case in
wrongful termination matters.
o So CA and MR differ on this particular issue.

2. Breach of Duty By Lawyer

- An attorney is released from obligations of secrecy if disclosure of
communications, otherwise privileged, becomes necessary to protect the attorney's
own rights, such as when the attorney's integrity, good faith, or performance of
duties is questioned by the client who has filed disciplinary charges, or claimed
malpractice or ineffective assistance of counsel.
o By bringing a cause of action, client waives the privileged information,
because the only way the lawyer can defend against those charges is by
revealing what was said related to those allegations.
o Bittaker v. Woodford:
 D convicted of multiple murders sought habeas corpus on the grounds of
ineffective assistance of counsel.
 Court held that waiver of the a/c privilege extended only to litigation of
the federal habeas petition, and couldn’t be turned over to other law
enforcement or prosecutorial agencies.
- The exception is limited to communications between the client and the former
attorney charged with the malpractice.
o Former attorney can't get to communications between former client and his
current counsel. Schlumberger.
o Former client can't get communications between former attorney and his
malpractice carrier. Travelers Insurance Companies.
- Solin v. O'Melveny & Myers (CA)
o Facts: clients hired attorney Solin and gave him confidential info about their
criminal activities. Solin hired counsel from O'Melveny to advise him
personally about this representation. Solin disclosed the confidential info to
Chapter 11. Exceptions to the Attorney-Client Privilege 3

the O'Melveny attorneys, but later filed suit against those attorneys claiming
he received incompetent advice. Attorney-Defendants wanted to disclose the
client's confidences, and the clients intervened to try to claim the a/c privilege.
o Holding: A/C privilege outweighs interest in Plaintiff bringing suit. An
attorney plaintiff may not prosecute a lawsuit if in doing so client confidences
would be disclosed.

II. THE CRIME-FRAUD EXCEPTION

- CA Evidence Code:
o "There is no privilege ... if the services of the lawyer were sought or obtained to
enable or aid anyone to commit or plan to commit a crime or fraud."
o Communication to an attorney that constitutes a threat to a third party does not
fall within the crime-fraud exception.
 Note: the threat, if made during a confidential communication with an
attorney where advice is given, then it would be protected under the
attorney-client privilege.

1. Conduct Triggering the Crime-Fraud Exception

- The exception focuses on the intent of the client, not the intent of the lawyer, who
does not have to be aware of the fraud for the crime-fraud exception to apply.
o It applies when a client knew or should have known that the intended act was
unlawful and the attorney's advice or services were sought to facilitate the
crime or fraud.
o If lawyer knows advice is being sought to commit or continue committing a
crime, then the lawyer is a co-conspirator.
- Exception does NOT apply:
o With attorney-client communications concerning past or completed crimes.
o Freedom Trust v. Chubb Group of Insurance Companies (C.D. Cal.): Federal
court concluded that the California Supreme Court would hold that bad faith
does not fall within the scope of the crime-fraud exception.
 Bad Faith is not a crime or fraud in California

2. Procedures to Evaluate Application of the Crime-Fraud Exception

- Zolin (SCOTUS):
o A district court in appropriate circumstances may conduct an in camera
review of privileged documents to assess whether they fall within the crime-
fraud exception.
o The district court should conduct a Two-Step analysis:
1) Require that the party alleging crime-fraud show a factual basis adequate
to support a good faith belief by a reasonable person that an in camera
review of the materials may reveal evidence to establish the claim that
the exception applies; and
Chapter 11. Exceptions to the Attorney-Client Privilege 4

2) If this showing has been made, make a discretionary decision whether to

order an in camera review in light of the facts and circumstances
surrounding a particular case.
- In re Gran Jury Subpoena (9th Cir.): In the second step of the Zolin analysis, the
court may consider available evidence other than just that brought by the one
arguing for the exception.
o But Zolin does not require the court to undertake such an examination
- In re Napster (9th Cir.)
o Both parties have a right to present evidence to the district court on the
applicability of the crime-fraud exception.
o Party seeking disclosure must prove by a preponderance of the evidence that
the crime-fraud exception appliess.

III.THE "DEATH OR SUBSTANTIAL BODILY HARM" EXCEPTION

- CA Evidence Code:
o "There is no privilege ... if the lawyer reasonably believes that disclosure of any
confidential communication relating to representation of a client is necessary to
prevent a criminal act that the lawyer reasonably believes is likely to result in
death of, or substantial bodily harm to, an individual."

- This section concerns disclosure of information during a legal proceeding after the
opposing side has made a request for discovery.
o For Example: People v. Dang
 Facts: During trial, defendant implies when speaking to attorney that he
is going to kill one of the witnesses.
 Holding: Exception applies, and the threat can be admitted in court.

- What about threats made outside of the litigation context?

o Whether any attorney may make a voluntary affirmative disclosure of client
threats or crimes outside the litigation context is discussed in Chapter 13 – they
may disclose to prevent death or substantial bodily harm.

IV. THE SHARED INFORMATION EXCEPTION

In certain situations, the privilege is extended even though disclosure has been made to
third parties but there are exceptions:

1. Joint Clients Exception

- Permits discovery among the joint clients who have shared confidences with each
other while being involved in the same matter, and now have become adversaries.
o CA Evidence Code: "Where two or more clients have retained or consulted a
lawyer upon a matter of common interest, none of them, nor the successor in
interest of any of them, may claim a privilege under this article as to a
communication made in the course of that relationship when such
Chapter 11. Exceptions to the Attorney-Client Privilege 5

communication is offered in a civil proceeding between one of such clients (or

his successor in interest) and another of such clients (or his successor in
interest)."
- Difficulties arise when the communication from one client to the attorney was made
in confidence when the other client was not present.
o Hecht v. Superior Court (Ferguson) (CA): All partners in a partnership
business are entitled to attorney-client privileged communications relating to
the partnership business. Therefore, conversations between husband and
partnership attorney were discoverable for the limited purpose of revealing
how the wife was deprived of participation in the new corporation.

a. Joint Clients in Insurance Cases

o Glacier v. Superior Court (Camou) (CA) - 95 ‘
o Cal. App. 3d 836:
 Facts: Patient of a doctor died. Heirs of the patient sued doctor for
medical malpractice. Because the judgment against the doctor exceeded
the insurance policy limit, the doctor had a potential bad faith failure to
settle cause of action against the insurer, which he assigned to the heirs of
the patient, who then sued the insurer. Heirs sought discovery of files of
the law firm hired by the insurer to represent the insurer and the doctor
(the insured).
 Holding: No privilege - Exception applies
- Because the insured had assigned the bad faith cause of action
against the insurance company to the heirs, the heirs stand in the
shoes of the insured.
- Essentially, through the heirs, the insured is an adversary to the
insurance co.
- Communications between the lawyer and the other joint client, the
insurance company, are therefore discoverable, even though the
insured doctor was not present during these communications.
o Exception does not apply where Insurer retains its own counsel to determine
whether it is liable under a policy with the insured.
 Because here, the insurer has not yet employed an attorney to defend the
insured, which would trigger the exception.

2. Joint Defense, Common Interest, or Pooled Information

- Restatement:
o "If two or more clients with a common interest in a litigated or nonlitigated
matter are represented by separate lawyers and they agree to exchange
information concerning the matter, a communication of any such client that
otherwise qualifies as privileged ... that relates to the matter is privileged as
against third persons."
o "Any such client may invoke the privilege, unless it has been waived by the
client who made the communication."
o The common interest may be "either legal, factual, or strategic in character."
Chapter 11. Exceptions to the Attorney-Client Privilege 6

- NO CA Statute contains a joint defense or common interest evidentiary privilege.

o But CA law protects common interests under a waiver analysis, whereby
protection under the attorney-client privilege is not lost (there is no waiver) if
there is disclosure of a privileged communication to persons having common
interests "when disclosure of the communication is reasonably necessary to
further the interest of the litigant."
o A common interest agreement strengthens the case against waiver, but such an
agreement is neither a requirement nor a guarantee. OXY Resources (CA).

- President v. Office of Independent Counsel

o Facts: OIC wants notes from Office of White House Counsel in investigation
of potential criminal activity.
o Holding: There is NO common interest, because the White House itself is the
client, and it cannot be sued, and therefore no one can have a common interest
with the White House, which is an institution impervious to legal liability.

- Note: with these exceptions, outsiders don't have access to information

o It's only when people turn on each other.

V. THE TESTAMENTARY EXCEPTIONS

- CA Evidence Code:
o Involves the passage of property after the death of a client
o The exceptions are intended to allow the deceased client's lawyer to effectuate
the client's true desires, especially when the distribution of the client's property
has become a matter of dispute among contending heirs.
o Exceptions only apply to communications arising under the relationship between
the attorney and the deceased client.

- California: NO privilege "as to a communication relevant to an issue between parties

all of whom claim through a deceased client...."
o Exception does not apply if the legal dispute is between the estate and a
“stranger.”
o Clark v. Second Judicial District: The exception does not apply when parties
argue that they are entitled to share in the estate because the decedent breached a
K to leave them property in a will. Here, the plaintiff is a “stranger” -- claiming
"against" rather than "through" the decedent.

o Fletcher (CA): the rule refers only to communications between the decedent and
the decedent's attorney, and not to communications between one of the claimants
and that claimant's attorney (even if claimant's attorney and decedent's attorney is
the same person).

VI. THE FIDUCIARY EXCEPTION

- United States v. Mett (9th Cir.)
Chapter 11. Exceptions to the Attorney-Client Privilege 7

o Facts: Defendants convicted of conduct relating to improper transactions

involving pension benefit plans administered by them, as trustees. They contend
that memoranda sent to them by their then-counsel which was admitted into
evidence, as well as the counsel's testimony relating to the memoranda, should
have been excluded in light of the attorney-client privilege. Government argues
the "fiduciary exception" to the a/c privilege.
o Issue: A/C Privilege?
o Rule: Fiduciary Exception:
 Where a fiduciary (e.g., trustee) seeks an attorney's advice on a matter of
plan administration and where the advice clearly does not implicate the
trustee in any personal capacity, the trustee cannot invoke the attorney-client
privilege against the plan beneficiaries.
- Exception is extended to permit the government to assert the
exception in the beneficiaries' stead when prosecuting malfeasance
in ERISA plan administration.
 On the other hand, when a plan fiduciary retains counsel in order to defend
herself from civil or criminal liability against the plan beneficiaries (or the
gov't acting in their stead), the attorney-client remains intact.
o Holding: Attorney-Client privilege protected the memoranda – the memoranda
make it clear that advice rendered was not "on a matter of plan administration."
They are devoted entirely to advising the defendants regarding their own personal
civil and criminal exposure in light of undocumented withdrawals that had
already occurred.

- Wells Fargo Bank, N.A. v. Superior Court (CA Supreme Court)

o Facts: Beneficiaries of a private trust seek to compel the trustee (Wells Fargo
Bank) to disclose its privileged communications with attorneys.
o Issue: A/C Privilege?
o Holding: Attorney-Client Privilege Exists
 CA does not recognize a "fiduciary exception" to the a/c privilege.
 The trustee, rather than the beneficiary, is the client of an attorney who gives
legal advice to the trustee, whether on the subject of trust administration or
of the trustee's own potential liability (different from federal courts).

VII. THE DERIVATIVE SUIT EXCEPTION

- Dickerson v. Superior Court (Ferrito) (CA)
o Facts: Minority shareholders of ADZ sued Dickerson, the majority
shareholder and director, for breach of fiduciary duty and fraud involving an
agreement between Dickerson and Harte-Hanks Communications, and its
subsidiary Santa Clara Publishing, whereby Harte and Santa Clara would
purchase all ADZ stock. Minority shareholders took deposition of the ADZ
lawyer, but the lawyer refused to answer questions about his discussions w/
Dickerson concerning the acquisition, the benefits made to Dickerson, and a
meeting he had with Dickerson.
Chapter 11. Exceptions to the Attorney-Client Privilege 8

o Issue: A/C privilege?

o Rule: As long as there is a holder of a privilege in existence, the attorney has
the duty to exercise the privilege unless the holder of the privilege otherwise
instructs him not to do so (because only the holder has the right to waive the
privilege)
o Holding
 Here, the client holding the privilege (ADZ- the corporation) merged
into Santa Clara Publishing and has ceased to exist. The privilege is
now held by ADZ's successor in interest (Santa Clara Publishing).
 Since the holder of the privilege is in existence, the a/c privilege can be
invoked by the attorney
 CA judiciary will not make an exception for the privilege - must come
from the legislature

- Derivative Suit Exception (Garner, 5th Circuit)

o In the situation where a corporation was in litigation against its own
stockholders, beneficiaries (stockholders) may show cause as to why the
privilege should not be invoked in the particular instance.
o BUT, this exception does not apply to confidential communications between
the entity and its attorney that concern the derivative action itself, because the
entity has the right to seek legal advice when sued without that advice being
turned over to the adversary.
- CA courts have continued to reject a shareholder exception (like Garner) to the
attorney-client privilege, even in a derivative action, and even with closely held
corporations.
o McDermott (CA):
 Facts: When shareholder brings action in place of the entity,
because the entity refuses to bring the action against
corporation's outside counsel.
 Holding: A shareholder may not sue in this instance.
Derivative lawsuit for malpractice against corporate outside
counsel raises unique attorney-client privilege issues. Because
the shareholders are not a holder of the privilege, they can't
waive the privilege by filing a lawsuit on the corporation's
behalf. As a result, since the corporation hasn't waived the
privilege, the third party attorney is foreclosed from defending
himself to the action because he still has to honor the privilege.
This can't be the case.

VIII. WAIVER OF THE PRIVILEGE

- General Rule: If you are the holder of the privilege, you are entitled to waive the
privilege, expressly or impliedly by conduct.
o Attorneys cannot waive the privilege without authorization by the client,
because they are not the holders of the privilege.
Chapter 11. Exceptions to the Attorney-Client Privilege 9

- CA Evidence Code:
o (a): "holder of the privilege, without coercion, has disclosed a significant part of
the communication or has consented to disclosure made by anyone. Consent to
disclosure is manifested by any statement or other conduct of the holder of the
privilege indicating consent to the disclosure...."
o (b): With joint holders of a privilege, waiver by one holder "does not affect the
right of another joint holder to claim the privilege...."

1. Express Waiver
- Holder of the privilege can expressly waive its protection
- Either I'll disclose or authorize my attorney to disclose, through a statement or
writing of some kind = WAIVER

2. Implied Waiver
- Conduct of client could equal a waiver
- Types of Implied Waiver:
1) Implied Authority
 Attorney has the authority to waive privilege on behalf of his client
 Usually for when the attorney needs certain information to make a
settlement or plea bargain, or to obtain any other advantage for the
client.
2) Implied Waiver by Silence
 Client offers no objection when he becomes aware that the lawyer
intends disclosure of certain information.
3) Implied Waiver by Claim Assertion
 If you assert a claim against a lawyer that the lawyer has messed up the
case.
 Only way attorney can defend himself is by disclosing the
communications relevant to the claim against him = WAIVER
 There is a choice for the client -- if he wants to litigate a claim against
his attorney, then he must waive the privilege to the extent necessary to
give his opponent a fair opportunity to defend against it.
4) Advice of Counsel
 Asserting advice of counsel in defense of some litigation setting, you
can't then say that the supposed advice can't be disclosed in court =
WAIVER
a. Limited Waiver (Exception to the policy of Total Waiver)

(a) Selective Waiver

 Even if communications between a lawyer and a client are shared with third
parties, there may be no waiver if the sharing was reasonably necessary to
further the interests of the client.
o Permits selective disclosure to that third party without sacrifice of the
privilege to all other interested persons or parties.
Chapter 11. Exceptions to the Attorney-Client Privilege 10

 CA Evidence Code: the privilege is not waived "when such disclosure is

reasonably necessary for the accomplishment of the purpose for which the
lawyer ... was consulted."
o McKesson HBOC v. Superior Court (CA)
 Facts: Gov't announced an investigation of McKesson for
possible securities fraud. McKesson retained a law firm to
perform an internal review, and the law firm prepared a report
for McKesson. Law firm shared the report with the Gov't subject
to a confidentiality agreement that preserved the confidentiality
of the materials passed to the Gov't. Shareholders of McKesson
sued and wanted those materials. Court said there had been
waiver of the attorney-client privilege.
 Holding: Total Waiver - Selective Waiver exception does not
apply.
o Law firm was hired to investigate the alleged
fraud and to determine who was responsible.
Disclosure to the government was not necessary
to accomplish that assignment.
o Issue of confidentiality agreements is open in jurisdictions that haven't
addressed this issue.

 Waiver may occur when an attorney shows documents to a fact witness or

expert witness to assist in the presentation of testimony.
o Sullivan v. Superior Court (Spingola)(CA)
 Facts: a client during a deposition was asked if she had used
anything to refresh her memory. She responded that she had
used a transcript of a tape recorded interview with her attorney
who had asked about the facts of the case. Opposing counsel
sought discovery of the transcript under CA Evidence Code.
 Rule:
Any writing used by a witness to refresh his or her memory
while testifying, or prior thereto, must be produced at the request
of an adverse party.
 Holding: NO Waiver when client used transcript to refresh her
memory. The word "writing" was never intended to mean a
transcription of a client's original discussion with her attorney.
That document being used to refresh the client's memory is not
waived.
 Note: Congress has changed federal law so that core work product given to a
witness continues to be protected against disclosure to opposing counsel.
(b) Partial Waiver
o CA Evidence Code: privilege is totally waived if the holder "has disclosed a
significant part of the communication or has consented to such disclosure
made by anyone."
o Statements that are "preliminary" or foundational" or "vague" are not
specific enough to be "significant," and a mere acknowledgement that a
Chapter 11. Exceptions to the Attorney-Client Privilege 11

lawyer and client had communications does not constitute a disclosure

substantial enough to conclude that the privilege is waived. Travelers.
 Unless the substance of the protected communication was itself put
into issue by the privilege holder – then privilege is waived.
o In re von Bulow (2d Cir.):
 Facts: Dershowitz gets a defendant off in a criminal case for the
attempted murder of his wife, but defendant is then sued in a separate
civil case by his wife. Before civil case, defendant had consented to
the writing of a book by Dershowitz which disclosed communications
between him and the defendant, as well as communications between
defendant and other defense counsel. Plaintiff in the civil case now
wants both the communications published in the book, along with all
other related communications, including w/ other defense lawyers in
the case.
 Issue: Waiver?
 Holding
 Defendant's acquiescence in and encouragement of the book
constituted a consent to Dershowitz's disclosure of his
confidences and effectively waived his attorney-client privilege
as to confidential communications actually disclosed in the book.
 As to undisclosed portions of those communications or as to
other related communications on the same subject matter, the
privilege was NOT waived regarding this material.
- Total waiver would not apply when the disclosures were
extrajudicial and have not subsequently been placed at
issue during litigation by the privilege holder in court.

IX. TERMINATION OF THE PRIVILEGE

- Swidler & Berlin v. United States (SCOTUS)
o Facts: Attorney made notes of an initial interview with a client shortly before the
client committed suicide. Government now wants his notes for use in a criminal
investigation. Attorney claims that the notes are protected by the attorney-client
privilege and work-product privilege.
o Holding: Attorney-Client privilege survives the death of the client.
- Courts have 5 different answers to the question of whether the privilege survives the
death of the client:
o Swidler (For Federal Courts): Privilege is ABSOLUTE
o CA Approach:
 The privilege survives the death of the client
 Once the estate is finally distributed and his personal representative, the
executor or administrator, is discharged.
 Example: Bing Crosby Case
 Facts: while he was alive, Crosby entered into record contracts and
hired a person to set up informal organization called BCE. Crosby
then died and executor became holder of estate. Executor established
Chapter 11. Exceptions to the Attorney-Client Privilege 12

company called HLC, which then acquired BCE. Record companies

want attorney-client communications.
 Rule:
 CA Evidence Code 954(c): no privilege if no holder
 Holder is personal representative of estate if client is dead.
 Holder is a successor of an entity which is no longer in existence.
 Holding:
 Crosby's privilege was personal and therefore did not pass to
BCE - no holder exists, so no privilege anymore.
 MR: attorney may disclose to prevent reasonably certain death or bodily
harm.

o Privilege passes to client's heirs, who become joint successor holders

o Privilege ceases upon the death of the original holder
 Usually applies when the client is an expired corporation that has not been
absorbed into a new corporate entity.

o The absolute privilege converts into a conditional privilege where the interests of
justice outbalance preservation of the secrecy of the communications (this has
been limited to rare criminal situations – where it may save a defendant’s life).

1. The Dead Client Confession Problem

- Macumber (AZ): Client made confession to attorney that he had committed the
murder that defendant was on trial for. Client died and Defendant wants this
confession disclosed by Client's attorney.
o AZ Supreme Court held that the privilege does not terminate with death, and
is usually suspended only where it is in the best interests of the deceased.
Communication is not discoverable.
- People v. Vespucci (NY): Even if the information was discoverable from the
attorney, it would not be admissible at trial because the statements by the client
"would clearly be hearsay and not fit into the exception of a declaration against
penal interest...."

a. Prosecutors and Wrongful Convictions

o Not addressed in CA
o MR: Prosecutors must meet the requirements of MR
 If a prosecutor becomes aware of "new, credible and material evidence
creating a reasonable likelihood that a convicted defendant did not commit
an offense of which the defendant was convicted," the prosecutor must
"promptly disclose" the evidence to a court or to another appropriate
authority.
 If conviction was obtained in the prosecutor's jurisdiction, disclosure must
also be made to the defendant's attorney.
 If the prosecutor becomes aware of "clear and convincing evidence" that a
defendant in the prosecutor's jurisdiction was wrongfully convicted, the
prosecutor "shall seek to remedy the conviction."
Chapter 11. Exceptions to the Attorney-Client Privilege 13