The First Appellate District Confirms that the Attorney-Client Privilege and the Attorney Work Product Doctrine Apply to Attorney’s Pre-Litigation Investigation

In City of Petaluma, the former employee filed a charge with the U.S. Equal Employment Opportunity Commission (“EEOC”) alleging sexual harassment and retaliation during her employment with the City of Petaluma (“City”). The City hired an outside attorney to perform an impartial investigation of the EEOC complaint and to assist in preparing to defend the City in the former employee’s anticipated lawsuit. The retainer agreement specified that this investigation would entail interviewing witnesses, collecting and reviewing pertinent information, and providing a report. It also instructed the outside attorney not to “render legal advice as to what action to take as a result of the findings of the investigation.” In connection with discovery propounded in the subsequent lawsuit filed by the former employee, the trial court ordered the City to provide documents and testimony relating to the outside attorney’s investigation, reasoning that neither the attorney-client privilege nor the attorney work product doctrine protected such information because the attorney did not render legal advice and that the City waived any privilege by asserting an avoidable consequences defense. The City filed a writ petition challenging this order, and the Supreme Court directed the First Appellate District to issue an order to show cause why the City’s requested relief should not be granted.

In instructing the trial court to vacate its order, the First Appellate District rejected the former employee’s argument that the subject protections did not apply because the attorney was only a fact finder and not retained to provide a legal service. It explained that the attorney-client privilege and the attorney work product doctrine require an attorney-client relationship where the client retained the attorney for the “dominant purpose” of providing “legal service or advice” in the attorney’s professional capacity. In this instance, the City formed an attorney-client relationship with the outside attorney, who the City retained “to use her legal expertise to conduct a factual investigation that would, in turn, be the basis for the City Attorney to provide legal advice to the City.” Because such fact-finding constitutes “legal services,” the appellate court concluded that both the attorney-client privilege and the attorney work product doctrine applied to the outside attorney’s investigative efforts. It also held that the City did not waive these protections by asserting the avoidable consequences defense because the investigation occurred post-employment. The appellate court remanded the matter because the record lacked a privilege log by which to determine whether certain materials related to the investigation were protected, except for the outside attorney’s written report, which, it ruled, warranted protection.

City of Petaluma soundly rejected the attempt to draw a distinction between “legal service” and “legal advice” in the context of the hallowed attorney-client privilege and attorney work product doctrine, while also arguably serving as precedent for assertion of the “anticipation of litigation” doctrine in response to requests seeking discovery of investigative efforts. In addition, it confirms one key benefit of promptly retaining impartial outside counsel to investigate upon receipt of notice of a claim that may ripen into litigation. Along with preserving evidence, a client has the comfort of knowing that the attorney’s efforts should be protected from disclosure during discovery. That being said, as exemplified by the appellate court’s remand order, there is no guarantee that the fruits of any investigation will receive protection. This decision reinforces the need for an attorney tasked with conducting an investigation to exercise care in ensuring that the materials created during the course of said investigation constitute an attorney-client communication and/or attorney work product and that only the client is the recipient of such materials to avoid a claim of waiver.

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