Regents v. WCAB ( 2014 )

Filed 5/23/14; pub. order 6/17/14 (see end of opn.)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA et al.,
Petitioners,
G048217
v.
(WCAB No. ADJ3256213)
WORKERS’ COMPENSATION
APPEALS BOARD AND SHIRLEY OPINION
LAPPI,
Respondents.
Original proceeding; petition for a writ of review challenging an order of
the Workers’ Compensation Appeals Board. Decision annulled.
Law Offices of Jodie P. Filkins and Jodie P. Filkins; Sedgwick, Christina
Imre and Michael Walsh for Petitioners.
No appearance for Respondent Workers’ Compensation Appeals Board.
Baziak & Steevens and Mark J. Steevens for Respondent Shirley Lappi.
We granted review in this writ proceeding to address two related issues:
First, whether the Evidence Code statutes governing privilege are applicable to workers’
compensation administrative proceedings; and second, whether the Workers’
Compensation Appeals Board (WCAB) acted improperly by ordering a party to produce
documents it claims are privileged to a special master for the purpose of allowing the
master to assess the merits of that privilege claim.
We conclude the Evidence Code statutes governing privilege are applicable
in workers’ compensation proceedings. And because Evidence Code section 915 (section
915) expressly prohibits a tribunal from ordering a party to produce documents for
review as a means of determining the validity of a claimed privilege, we also conclude
the WCAB erred in this case by ordering that documents which petitioners, The Regents
of the University of California (the University) and its claims agent Sedgwick Claims
Management Services, Inc. (Sedgwick), contend are privileged, must be produced to a
special master. We return the case to the WCAB with directions to resolve the privilege
dispute without any requirement the documents be subject to a preliminary review.
FACTS
Respondent Shirley Lappi sustained a workplace injury in 2003 while
working as an administrative assistant for the University of California at Irvine and she
filed a claim against the University for workers’ compensation benefits.
In 2007, Lappi made a claim for additional workers’ compensation based
on an aggravation of her initial injury. Lappi noticed the deposition of the Sedgwick
claims examiner assigned to her case and sought production of all unprivileged
documents pertaining to her case, including Sedgwick’s claims file.
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After the University moved to quash the deposition, the workers’
compensation judge (WCJ) ordered the claims examiner to make himself available for
deposition at one of two alternative locations and to “produce all non-privileged portions
of the claims file.”
The University then produced a privilege log, identifying certain documents
contained in its file as exempt from disclosure under “one or more privileges recognized
by California Evidence Code.” The privilege log was drafted by counsel representing
both Sedgwick and the University, and identified, among other things, correspondence
between Sedgwick and counsel, counsel’s “invoices” and “[p]rivileged portions of claims
notepad, post January 2008.”
At the deposition, the claims examiner produced the claims file, which
included computer notes indentified as “Notepad Detail.” However, he produced none of
these notes for the period after January 11, 2008, when the University initially retained
counsel in this matter. Lappi made a further demand for the missing documents, which
the University refused to produce on the basis of claimed privilege.
The parties returned to court on February 28, 2012. The WCJ noted the
parties were unable to agree on the release of the notes and ordered the University “to file
a copy of computer ‘Notepad detail’ with the WCJ . . . for [an] in camera review of
alleged confidentiality of said notes.” The matter would then be set for a further status
conference for discussion with counsel on the privileged or not privileged nature of the
documents. The University did not formally object to that order and apparently
complied.
On May 1, 2012, the WCJ returned the claims notes to the University and
ordered it to “review the Claims notes and serve any [and] all unprivileged email
notations on [Lappi’s counsel].” The University was also ordered “to provide a log (with
dates of documents) re: any withheld information.”
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In response to that order, the University prepared a second privilege log, in
which it identified 205 documents it claimed were privileged, identifying “attorney-client
privilege, confidential communications, and work product” as the applicable privileges.
Lappi then objected to the University’s designation of 49 of those listed documents,
claiming they “do not represent communications between your office and your client and,
therefore, cannot be protected by attorney-client privilege.” The objection made no
reference to attorney work product.
Of the 49 documents disputed by Lappi, 48 were described in the privilege
log as either notes, action plans, e-mail or communications which either reflected or were
based upon “advice of counsel.” The remaining document was described as
correspondence by the University’s counsel directed to a physician, with a copy to
Sedgwick.
As the parties were unable to resolve this discovery dispute, the case went
to trial before a WCJ on that issue. At trial, the University agreed two of the documents
disputed by Lappi were not privileged, leaving 47 still in dispute. The court then heard
evidence from Sedgwick’s supervising claims representative concerning the disputed
documents. Prior to Lappi’s cross-examination of the claims representative, she
requested the WCJ conduct an in camera review of the disputed documents. The
University objected to any such review.
On cross-examination, the claims representative was questioned regarding
each of the disputed documents individually. With respect to nearly all of them, the
representative denied any present recollection of either the document’s specific content or
the circumstances surrounding its creation. However, she explained that she had been
directly involved in the creation of the privilege log with counsel and had reviewed each
of the documents when it was prepared. At that time, she determined each of the
disputed documents contained communications “to defense counsel or from Sedgwick.”
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After the hearing concluded, the WCJ ruled that while “any
communications to and from the employer/claims administrator and defense counsel are
privileged and their review both prohibited and unnecessary . . . the claims notes in
regard to provision of benefits, claims activities and adjustment plans, and supervisory
review of claims administration are not privileged merely because the claims
representative has consulted with counsel during the pendency of the claim.”
Accordingly, the WCJ concluded that only 11 of the 49 disputed items, which were
identified as “communications with counsel,” were protected from disclosure.
The University filed a petition for reconsideration of the WCJ’s order
before the WCAB. Lappi opposed the petition, and the WCJ recommended the petition
be denied. The WCAB issued orders dismissing the petition for reconsideration and
granting removal of the issue to itself on its own motion. It explained that
reconsideration was appropriate only in the case of “final orders,” and not in the case of
discovery rulings or evidentiary disputes. Removal, however, was discretionary and was
appropriate in cases where there is a showing of substantial prejudice or irreparable harm.
On the merits of the dispute, the WCAB noted that if the disputed
documents “do not refer to an attorney’s communication, they may not be protected by
the attorney-client privilege. Moreover, if a note with an action plan does not refer to an
attorney’s impressions, it is difficult to see how the action plan would fall within the
work product doctrine.” However, the WCAB explained that “it is not clear from the
testimony at trial or from the petition whether the notes sought actually summarize or
refer to attorney communications.” Given this dearth of concrete information, the
WCAB concluded the WCJ’s decision requiring production must be rescinded and that
the “best course is to return the matter to the WCJ so that she may appoint a special
master” who would “conduct an in camera review of the disputed documents and to
provide that report to the parties and to the WCJ.” After the special master’s report was
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presented to the WCJ and the parties, and any further issues addressed, the WCJ was
directed to “issue a new decision.”
DISCUSSION
The University petitioned this court for review of the WCAB’s decision,
presenting this question for our determination: “Do the attorney-client privilege, the
absolute work product doctrine and Evidence Code section 915 operate within workers’
compensation proceedings in the same fashion as in judicial proceedings; i.e., can the
[WCAB] order an in camera review of documents in order to determine whether
attorney-client privilege or the absolute [work product doctrine] apply despite Evidence
Code section 915?” The answer to that question is: Yes they do and therefore, no it
cannot.
1. Propriety of Review
Before we reach the merits, we must address Lappi’s assertion that our
review of the WCAB decision is premature and unauthorized because it does not qualify
as a “final order from which a petition for writ of review may be taken” under Labor
Code section 5950 (section 5950). (Initial capitalization omitted.) According to Lappi,
review is inappropriate because the WCAB’s decision is merely an interim one which
returns the parties’ discovery dispute to the WCJ for further proceedings without finally
resolving their dispute.
Lappi’s argument misconstrues the issue presented for our review. We are
not being asked to determine the ultimate outcome of the discovery dispute – i.e.,
whether the University must produce the documents it claims are privileged to Lappi.
Instead, the University’s petition sought review of the WCAB’s specific order requiring
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production of the disputed documents to a special master for an in camera inspection.
Although Lappi characterizes this order as merely “an appropriate preliminary step
before determining whether . . . any of the documents are discoverable,” that
characterization begs the question. The issue before us is whether the order is an
appropriate preliminary step in resolving this discovery dispute. While the WCAB’s
decision does not finally resolve the parties’ discovery dispute, it does reflect a final
determination of the University’s right to shield these allegedly privileged documents
from the contemplated third-party inspection. If we do not review the order now, there
will be no further opportunity to do so before it goes into effect. Consequently, review of
the order is appropriate under section 5950.
2. Propriety of Compelling Production to Aid in Assessing Privilege
Section 915 is found in division 8 of the Evidence Code (Evid. Code, § 900
et seq.), which governs privileges. It provides, in pertinent part that “the presiding officer
may not require disclosure of information claimed to be privileged under this division or
attorney work product under subdivision (a) of Section 2018.030 of the Code of Civil
Procedure in order to rule on the claim of privilege . . . .” (§ 915, subd. (a).) Section 915
carves out some exceptions to this rule, none of which are applicable here.
It is beyond dispute that section 915 would have prohibited the type of
document review ordered by the WCAB if this dispute had arisen in the context of an
ordinary civil case. (Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725,
736-740.) Moreover, our Supreme Court has also expressly concluded that such an order,
issued by the Public Utilities Commission, contravened section 915. (Southern Cal. Gas
Co. v. Public Utilities Com. (1990) 50 Cal.3d 31, 45, fn. 19.)
Lappi argues the order was proper here for two reasons: First, she suggests
the University had already waived any applicable privilege because it previously
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produced the documents to the WCJ on a computer disk at an earlier point in this dispute.
However, as the University points out, a waiver of privilege must be voluntary; i.e.,
“without coercion” (Evid. Code, § 912, subd. (a)), and its earlier production was in
response to an order by the WCJ. We agree that compliance with the WCJ’s order did
not constitute a voluntary waiver of privilege. (See Regents of the University of
California v. Superior Court (2008) 165 Cal.App.4th 672, 675 [concluding that
production of privileged materials to government agencies in response to demand was not
uncoerced, because parties feared adverse consequences flowing from refusal]; see also
Evid. Code, § 919, subd. (a)(1) [specifying that any privileged information
“erroneously . . . required” to be disclosed by the presiding officer in a proceeding is
inadmissible].)
Lappi’s second contention is that section 915 does not apply in workers’
compensation proceedings. In arguing the WCAB’s order was appropriate, Lappi relies
on the WCAB’s general statutory authority to “make inquiry in the manner, through oral
testimony and records, which is best calculated to ascertain the substantial rights of the
parties and carry out justly the spirit and provisions of this division.” (Lab. Code,
§ 5708.) At first blush, this argument is compelling. Labor Code section 5708 sets forth
a general rule authorizing the WCAB to adopt its own “rules of practice and procedures”
and specifies that in the conduct of hearings and investigations, the WCAB “shall not be
bound by the common law or statutory rules of evidence and procedure.” (Ibid., italics
added.) That language certainly appears to authorize the WCAB’s disregard of the
Evidence Code, including section 915.
However, when it comes to the treatment of privileged information
specifically, division 8 of the Evidence Code trumps this provision of the Labor Code.
Division 8 expressly applies to “any action, hearing, investigation, inquest or inquiry
(whether conducted by a court, administrative agency, hearing officer, arbitrator,
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legislative body, or any other person authorized by law) in which . . . testimony can be
compelled . . . .” (Evid. Code, § 901, italics added.) Moreover, Evidence Code section
910 explicitly overrides any other statute which might otherwise be viewed as limiting
application of the “rules of evidence” generally: “The provisions of any statute making
rules of evidence inapplicable in particular proceedings, or limiting the applicability of
rules of evidence in particular proceedings, do not make this division inapplicable to such
proceedings.” (Evid. Code, § 910, italics added.) It is well settled that “a more specific
statute controls over a more general one . . . .” (Lake v. Reed (1997) 16 Cal.4th 448,
464.)
In light of these provisions, it is clear that while the WCAB is free to adopt
rules of practice and procedures which ignore the “rules of evidence” set forth in the
Evidence Code, it nonetheless remains bound by the statutory requirements for dealing
with privilege found in division 8 of that code, including section 915. As a consequence,
the WCAB erred in this case when it ordered an in camera review of the University’s
allegedly privileged documents by a special master for the purpose of assessing the
merits of that privilege claim.
DISPOSITION
The order and decision of the WCAB remanding this case to the WCJ with
directions to appoint a special master to review the disputed documents is annulled. The
matter is returned to the WCAB with directions to reconsider the discovery dispute
without requiring any preliminary review of the documents.
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The parties are to bear their own costs in this proceeding.
RYLAARSDAM, ACTING P. J.
WE CONCUR:
MOORE, J.
IKOLA, J.
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Filed 6/17/14
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FOURTH APPELLATE DISTRICT
DIVISION THREE
THE REGENTS OF THE UNIVERSITY
OF CALIFORNIA et al.,
Petitioners,
G048217
v.
(WCAB No. ADJ3256213)
WORKERS’ COMPENSATION
APPEALS BOARD AND SHIRLEY OPINION
LAPPI,
Respondents.
The opinion in this matter filed on May 23, 2014, was not certified for
publication. Requests have been received to order publication of the opinion and it
appears that our opinion meets the standards set forth in California Rules of Court, rule
8.1105(c). The requests are GRANTED. The opinion is ordered published in the
Official Reports.
RYLAARSDAM, ACTING P. J.
WE CONCUR:
MOORE, J.
IKOLA, J.