## Facts

- Costco retained outside counsel to advise whether certain California warehouse managers were exempt from wage-and-overtime requirements.
- Counsel conducted confidential interviews with two managers and prepared a 22-page written opinion letter providing legal advice to Costco.
- Employees later filed a putative class action alleging Costco misclassified managers as exempt and failed to pay overtime.
- During discovery, employees sought production of the opinion letter; Costco asserted attorney–client privilege and work-product protection.
- The trial court appointed a discovery referee, ordered in camera review, and required production of a heavily redacted version, treating embedded manager statements as nonprivileged.
- The Court of Appeal declined to issue writ relief, leaving the production order in place.

## Issues

1. Whether a confidential attorney opinion letter to a corporate client is privileged in its entirety, including factual recitations drawn from client-related interviews.
2. Whether a court may compel in camera review of the allegedly privileged letter to determine privilege and order partial disclosure after redaction, consistent with Evidence Code § 915(a).
3. Whether Costco impliedly waived the privilege by placing counsel’s advice “at issue” in the litigation.

## Decision

- The California Supreme Court granted writ relief and held the trial court’s in camera review, redaction, and compelled disclosure order violated the attorney–client privilege.
- The court also held the procedure violated Evidence Code § 915(a)’s prohibition on requiring disclosure of purportedly privileged information to rule on the privilege claim.
- The court rejected an implied “at issue” waiver on these facts because Costco did not affirmatively rely on the opinion letter as a claim or defense.
- A peremptory writ issued directing the lower courts to vacate the production order and deny the motion to compel.

## Legal Principles

- A “confidential communication between client and lawyer” under Evidence Code § 952 includes legal opinions and advice given in confidence, and when the definition is met, the entire communication—including its recitation of facts—is privileged.
- The discoverability of underlying facts from other sources does not make an attorney–client communication discoverable when those facts appear within a privileged legal communication.
- Evidence Code § 915(a) generally bars courts from compelling disclosure (including in camera submission) of the disputed communication to decide whether it is privileged, absent a statutory exception.
- Implied waiver of the attorney–client privilege is narrowly applied and typically requires that a party affirmatively tender counsel’s advice as a basis for a claim or defense; denial of liability alone is insufficient.

## Conclusion

The court held that a confidential attorney opinion letter to a corporate client is protected in full by the attorney–client privilege and that courts may not order in camera review and redacted production of such a letter to separate “facts” from advice; absent a statutory exception or a narrow implied waiver, compelled disclosure is barred by Evidence Code § 915(a).


Costco Wholesale Corp. v. Superior Court, 47 Cal. 4th 725 (Cal. 2009)