Paknad v. Superior Court CA6 ( 2024 )

Filed 5/20/24 Paknad v. Superior Court CA6
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
MICHELLE PAKNAD, No. H050711
(Santa Clara County
Petitioner, Super. Ct. No. 19CV350641)
v.
ORDER MODIFYING OPINION
THE SUPERIOR COURT OF AND DENYING REHEARING
CALIFORNIA, COUNTY OF SANTA
CLARA, [NO CHANGE IN JUDGMENT]
Respondent,
INTUITIVE SURGICAL, INC., et al.,
Real Parties in Interest.
THE COURT:
It is ordered that the opinion filed April 29, 2024, be modified as follows:
On page 3, line 4, the section heading “A. Allegations of the Operative
Complaint,” is modified to read: “A. Paknad’s Allegations in the Trial Court.”
On page 5, the last sentence of the first full paragraph is modified to read:
Because of the first investigation, Heesewijk and Collins received written
warnings. Hill also told Paknad that Intuitive had “agreed that [Paknad] should
get a new lateral role with the same title and pay.”
The petition for rehearing filed on behalf of Michelle Paknad is denied.
There is no change in the judgment.
_____________________________________
GREENWOOD, P. J.
_____________________________________
LIE, J.
_____________________________________
WILSON, J.
Paknad v. Superior Court
H050711
2
Filed 4/29/24 Paknad v. Superior Court CA6 (unmodified opinion)
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SIXTH APPELLATE DISTRICT
MICHELLE PAKNAD, No. H050711
(Santa Clara
Petitioner, Super. Ct. No. 19CV350641)
v.
THE SUPERIOR COURT OF
CALIFORNIA, COUNTY OF SANTA
CLARA,
Respondent,
INTUITIVE SURGICAL, INC., et al.,
Real Parties in Interest.
Michelle Paknad sued her former employers, Intuitive Surgical, Inc. and Intuitive
Surgical Operations, Inc. (collectively, Intuitive), and former supervisors, Jeroen van
Heesewijk and Kevin Collins, for sexual harassment, gender discrimination, and unlawful
retaliation. While still Intuitive’s employee, Paknad made two formal complaints, which
Intuitive retained outside counsel, Andrea Kelly Smethurst (Smethurst), to investigate.
Smethurst prepared two reports in connection with the investigations (the Smethurst
reports), which she shared with company management and litigation counsel, Littler
Mendelson.1
For clarity, we refer to Andrea Kelly Smethurst as “outside counsel,” and
1
Intuitive’s employment counsel, Littler Mendelson, as “litigation counsel.”
Paknad requested the Smethurst reports and related investigative materials in
discovery. Citing the attorney-client privilege and attorney work product doctrine,
Intuitive provided only the names of the witnesses Smethurst had interviewed and the
non-privileged documents Smethurst had reviewed in preparing her reports. Paknad
subsequently moved to compel disclosure, which the trial court denied.
Paknad petitioned this court for a peremptory or alternative writ directing the trial
court to reverse its ruling. Following preliminary opposition from Intuitive, we
summarily denied the petition. Paknad then petitioned for review with the Supreme
Court, which granted the petition and transferred the matter with instructions to issue an
order to show cause.2 Having done so, we now conclude that Intuitive’s assertion of the
avoidable consequences defense and its discovery responses placed the Smethurst
investigations at issue, such that the attorney-client privilege is waived and disclosure of
the material “ ‘is essential for a fair adjudication of the action.’ ” (Wellpoint Health
Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th 110, 128 (Wellpoint).)
We will issue a peremptory writ of mandate directing the trial court to vacate its
November 28, 2022 order denying in part Paknad’s motion to compel, and to enter a new
order granting the motion as to the Smethurst reports and related investigative materials.
Upon a preliminary showing that such materials may contain absolutely privileged
information protected under Code of Civil Procedure section 2018.030, subdivision (a)
(section 2018.030(a)), the trial court may review the reports in camera “to determine if
some protection is warranted notwithstanding the waiver” of the attorney-client privilege.
2
Paknad has requested that we take judicial notice of her petition for review,
Intuitive’s answer, and her reply, filed in the Supreme Court in case No. S281065. We
deny Paknad’s request: The parties’ briefing in the Supreme Court was not before the
respondent court, and our task is to review the correctness of the respondent court’s order
based on the record before it, rather than “ ‘circumventing the normal sequence of
litigation.’ ” (Haworth v. Superior Court (2010) 50 Cal.4th 372, 379, fn. 2.)
2
(Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 740 (Costco); see also
People v. Superior Court (Jones) (2021) 12 Cal.5th 348, 366 (Jones).)
I. BACKGROUND
A. Allegations of the Operative Complaint
Intuitive develops, manufactures, and markets robotic devices designed to make
surgeries and other medical procedures less invasive. Intuitive markets and sells its
devices around the world. In 2010, Intuitive hired Paknad as a senior marketing manager
in its Sunnyvale office. Intuitive promoted Paknad to the role of director in 2015.
Paknad remained in that role until December 2018, at which time Intuitive terminated her
employment.
Paknad alleges that she suffered from sexual harassment, gender discrimination,
and illegal retaliation throughout her employment. The alleged discrimination and
harassment began in 2012, when Paknad’s then-direct supervisor, Greg Blair, began
“making her uncomfortable with his workplace behavior” by “follow[ing] [her] around
the office and to the restroom on occasion.”
Paknad continued to suffer from discrimination and harassment after she
transitioned to a more international role in 2014. While working as a part of the
Asian-Pacific (APAC) team, Paknad’s direct supervisors included (at various times)
Heesewijk, Collins, or both. Paknad alleged that Heesewijk engaged in “unwanted
sexual conduct toward [Paknad], which created a hostile, offensive, oppressive, and
intimidating work environment,” and “made it more difficult for [Paknad] to do her job.”
Heesewijk’s alleged misconduct started some time before October 2014 and continued
until 2018.
Paknad alleged that Collins “unfairly targeted” her as well, first as a colleague,
and later, as her supervisor. In 2015, while working together on a project, Collins called
Paknad the “red-headed stepchild” of Intuitive. Upon becoming her supervisor in 2016,
Collins allegedly reached out to another employee to get personal information about
3
Paknad, “including . . . whether [Paknad] liked to party, whether she liked to drink or get
drunk, and what her sexual preferences were.” Once in 2016, Collins called Paknad in
the middle of the night to reprimand her for a mistake she did not make.
Paknad also alleged that Heesewijk and Collins illegally retaliated against her for
raising compliance issues. The retaliation took the form of disparately restricting her
marketing budget, failing to support her at company events, openly ridiculing her during
presentations, and sabotaging her opportunities to seek other positions within the
company. Paknad attempted to discuss some of her concerns with Heesewijk and Collins
in 2017, but both men “criticized and ridiculed [Paknad] for asking for help.” When
Paknad persisted, Collins “referred [Paknad] to H[uman] R[esources] for any further
discussion.”
In January 2018, Collins informed Paknad that “she was going to be replaced,” but
that if another role opened up at Intuitive, “she might be able to interview for it.” In
March 2018, Heesewijk confirmed to Paknad that her current role “would be eliminated
at the end of 2018, as a result of which [Paknad] could look for a new role at [Intuitive].”
Paknad began discussing opportunities with other supervisors at the company, but failed
to secure a new position due to Heesewijk and Collins’s alleged retaliation and sabotage.
In April 2018, Paknad filed her first formal complaint with Intuitive’s Employee
Relations department, alleging “discrimination, harassment, and retaliation” against
Heesewijk and Collins. In response, Nancy L. Hill, then-Vice President of Employee
Relations, informed Paknad that the company had “engaged Andrea Kelly Smethurst, an
attorney and investigator, to look into these issues.” Smethurst completed her
investigation in June 2018 and prepared a report totaling “over 30 pages.” On June 12,
2018, Hill met with Paknad to discuss the outcome of Smethurst’s investigation. During
the meeting, Hill shared with Paknad select “bullet points” from the first Smethurst
report, including the following: (1) Smethurst confirmed that Collins had singled Paknad
out for negative behavior, (2) Smethurst substantiated one of Paknad’s sexual harassment
4
allegations against Collins, and (3) Smethurst found that Heesewijk and Collins had made
“false and defamatory accusations” about Paknad to others at the company.
Hill told Paknad that Heesewijk and Collins would retain their current roles at the
company, but would receive “some form of punishment” as a result of Smethurst’s
findings. When Paknad asked Hill about “all the bullying, compliance concerns and
disparate treatment” she had complained about, Hill responded that “the focus of the
investigation was the transition as you requested.” Paknad disagreed with Hill that her
complaint was limited to transition issues. Because of the first investigation, Heesewijk
and Collins received written warnings and Paknad received a “new lateral role with the
same title and pay.”
In August 2018, Paknad filed a second complaint, alleging that Heesewijk and
Collins were retaliating against her in response to her prior complaint. By this time,
Debbie D. Lauber had replaced Hill in Employee Relations and reached out to Paknad to
assure her that Intuitive “takes very seriously its obligation to ensure employees are
protected from retaliation following the submission of a complaint and/or closure of an
investigation.” Lauber informed Paknad that the company had once again “engaged
Andrea Kelly Smethurst, an outside, independent investigator to conduct an investigation
into [Paknad’s] claims of retaliation.” Smethurst’s second investigation lasted through
November 2018, and the scope of the investigation was expanded many times at
Paknad’s request. Smethurst also interviewed Paknad for “more than seven hours” in
connection with her second complaint. Upon conclusion of the investigation, Smethurst
prepared a second report, which she shared with Intuitive’s legal department and
litigation counsel.
After Smethurst completed her second investigation and report, Lauber notified
Paknad of Intuitive’s findings based on the report and provided her with a written
summary. That same day, Paknad responded to Lauber, challenging the “thoroughness
and credibility” of the investigation and inquiring into reasons why many aspects of her
5
complaints were “bifurcated / not properly explored.” Paknad continued to criticize the
second investigation throughout her employment, maintaining that Smethurst had “failed
to thoroughly investigate [her] claims of harassment, and did not evaluate the
pervasiveness or severity nor did she interview any witnesses.” Paknad also claimed that
“[m]any of [her] allegations are missing from the [report’s] findings and ‘facts’ are
verifiably incorrect.” In her operative complaint, Paknad alleged that during the second
Smethurst investigation, “half her concerns had not even been addressed . . . and the
outcome, as expected, was skewed to blame [Paknad] and support [Intuitive], Heesewijk,
and Collins.”
Intuitive terminated Paknad’s employment at the end of 2018. Paknad
subsequently sued Intuitive, Heesewijk, and Collins, alleging these eight causes of action:
(1) sex and gender discrimination—against Intuitive (Gov. Code,3 § 12940, subd. (a)),
(2) quid pro quo sexual harassment—against Intuitive, Heesewijk, and Collins (§ 12940,
subd. (j)), (3) hostile work environment sexual harassment—against Intuitive, Heesewijk,
and Collins (§ 12940, subd. (j)), (4) retaliation—against Intuitive (§ 12940, subd. (h)),
(5) failure to take all reasonable steps necessary to prevent and correct discrimination,
harassment, and retaliation—against Intuitive (§ 12940, subd. (k)), (6) wrongful
discharge—against Intuitive, (7) violation of Labor Code section 1102.5—against
Intuitive, and (8) negligent hiring, retention, and supervision—against Intuitive.
B. Intuitive’s Answer
Intuitive generally denied Paknad’s complaint. It also raised 19 affirmative
defenses. As the fourth of these, Intuitive alleged: “[A]t all times relevant, [Intuitive]
promulgated an anti-harassment, anti-discrimination, and anti-retaliation policy and
complaint procedure which was communicated to [p]laintiff, and [Intuitive] otherwise
exercised reasonable care to promptly prevent and correct any inappropriate conduct.”
3
Undesignated statutory references are to the Government Code.
6
Intuitive also alleged that Paknad’s claims “are barred, in whole or in part, because [she]
unreasonably failed to take advantage of the established complaint procedures, failed to
take advantage of other preventative or correcti[ve] opportunities provided by [Intuitive],
and otherwise failed to avoid harm.”
C. Paknad’s Discovery Request and Motion to Compel
On Paknad’s request for “[d]ocuments relating to [her] internal complaints of
discrimination, harassment, and retaliation, including reports, witness statements, and
summaries of witness testimony; and documents relating to any actions taken in response
to these complaints,” Intuitive withheld responsive documents it asserted were protected
by the attorney-client privilege and attorney work product doctrine. According to
Intuitive’s privilege logs, the withheld documents comprised the following: (1) the two
Smethurst reports, (2) Smethurst’s notes from witness interviews conducted during the
investigations, and (3) Smethurst’s communications with company management relating
to the investigations.
Paknad moved to compel disclosure of the withheld documents. Paknad first
argued that because Intuitive retained Smethurst in her capacity as a fact finder, the
attorney-client privilege did not apply. Second, even if the privilege did apply, Paknad
argued that it was waived because, as she asserted in a supporting declaration, Intuitive
had already disclosed “substantial amounts” of the reports and investigations to her.
Third, Paknad argued that by asserting the avoidable consequences defense, Intuitive had
placed the Smethurst investigations at issue. Finally, Paknad argued that she had
substantial need of the reports and related investigative materials to prove her claims and
rebut Intuitive’s defenses. Intuitive opposed the motion.
D. The Trial Court’s Ruling
The trial court denied Paknad’s motion to compel. The court first determined that
an attorney-client relationship existed between Smethurst and Intuitive because Intuitive
had presented sufficient facts to “support a prima facie showing that attorney Smethurst,
7
with legal expertise relevant to the claims of [Paknad], was hired by defendant to conduct
an investigation of pertinent facts, and with her legal expertise, synthesize the findings,
and provide conclusions and impressions for review and consideration by management
and outside employment counsel of defendant.” The court further found that Paknad’s
account of “statements . . . by Smethurst that the attorney was hired for a fact-finding
purpose” failed to overcome that showing.
Based on these findings, the trial court concluded that “the dominant purpose of
the representation of Smethurst was to provide legal services to [Intuitive] so that
[Intuitive], with further consultation with outside employment counsel, could determine
an appropriate course of action.” To that end, the reports were “communications from
Smethurst to [Intuitive] and support application of the attorney-client privilege. They are
also documents prepared by the attorney pursuant to the attorney-client relationship and
engagement that the evidence supports includes Smethurst’s impressions, conclusions,
opinions and legal theories. They are therefore protected from disclosure pursuant to the
attorney work product doctrine.”
Having found the existence of an attorney-client privilege, the trial court then
found that Intuitive did not waive that privilege through asserting the avoidable
consequences defense. In so doing, the court acknowledged the inherent tension in
Intuitive’s assertion of the defense: Despite Intuitive’s claim that it had drafted the
defense narrowly—“limited to [Paknad’s] failure to take advantage of established
complaint procedures and other preventative activities provided by [Intuitive]”—the
court noted that Intuitive expressly pleaded that it “exercised reasonable care to promptly
prevent and correct any inappropriate conduct.” The court therefore observed, “[T]he
assertion of [Intuitive] may place the adequacy of the investigation into issue if, as here,
[Paknad] was still employed at the time of the investigation and able to take advantage of
any corrective measures the employer undertook as a result of the investigation.”
8
Despite these observations, the trial court concluded that Intuitive’s assertion of
the avoidable consequences defense did not put the Smethurst investigations at issue.
The court accepted that Intuitive “does not seek to rely on the investigation itself as a
defense,” inferring that Intuitive’s “established anti-harassment, anti-discrimination and
anti-retaliation policy, and complaint procedure referred to in the affirmative defense”
existed “prior to and independent of the investigation.”
The trial court also concluded that Intuitive did not waive the attorney-client
privilege through disclosure and that Paknad had not established a substantial need for
the reports and related investigative materials.
II. DISCUSSION
Paknad argues that the trial court erred by finding the existence of an
attorney-client relationship between Smethurst and Intuitive. She next argues that even
assuming such a relationship, Intuitive’s answer and discovery responses have placed the
Smethurst investigations at issue, such that disclosure of the investigative materials is
required. Finally, Paknad argues that Intuitive’s disclosure of the reports’ contents to her
constituted waiver.
We conclude that substantial evidence supports the trial court’s finding of an
attorney-client relationship between Smethurst and Intuitive, giving rise to the
attorney-client privilege and work product protections. Intuitive, however, has waived
the privilege as to the Smethurst reports and related investigative materials by placing the
scope and adequacy of the investigations at issue, such that disclosure of the materials is
necessary for a fair adjudication of the action.
A. Standard of Review
“ ‘The standard of review generally applicable to review of discovery orders is
abuse of discretion, as management of discovery lies within the sound discretion of the
trial court.’ ” (Haniff v. Superior Court (2017) 9 Cal.App.5th 191, 198.) “ ‘In particular,
9
the abuse of discretion standard of review ordinarily applies to review of an order on a
motion to compel discovery.’ ” (Ibid.)
“ ‘[W]hen the facts asserted in support of and in opposition to the motion [to
compel] are in conflict, the trial court’s factual findings will be upheld if they are
supported by substantial evidence.’ ” (City of Petaluma v. Superior Court (2016)
248 Cal.App.4th 1023, 1031 (City of Petaluma).) But we apply “independent review to
the trial court’s conclusions as to the legal significance of the facts.” (Ibid.)
B. Substantial Evidence Supports the Trial Court’s Finding of an Attorney-Client
Relationship
To begin, we reject Paknad’s claim that the trial court erred in finding an
attorney-client relationship between Smethurst and Intuitive. “When a party asserts the
attorney-client privilege it is incumbent upon that party to prove the preliminary fact that
a privilege exists.” (State Farm Fire & Casualty Co. v. Superior Court (1997)
54 Cal.App.4th 625, 639.) On that party’s prima facie showing “that a communication
has been made ‘in confidence in the course of the lawyer-client . . . relationship, the
communication is presumed to have been made in confidence and the opponent of the
claim of privilege has the burden of proof to establish that the communication was not
confidential,’ or that an exception exists.” (Ibid.)
A defendant employer establishes “facts necessary to support a prima facie claim
of privilege, i.e., communication in the course of the lawyer-client relationship” upon a
showing that the attorney was “hired by [the] employer to conduct an investigation of the
charges of discrimination.” (Wellpoint, supra, 59 Cal.App.4th at p. 123.)
Substantial evidence supports the trial court’s finding that Intuitive hired
Smethurst to investigate Paknad’s charges of discrimination. General counsel Kara A.
Reiter’s declaration made that clear. According to Reiter, upon learning of Paknad’s
initial complaint, she consulted Intuitive management and hired Smethurst to investigate
Paknad’s allegations and recommend further action to the company as needed. On
10
concluding the first investigation, Smethurst prepared a report containing “mental
impressions and conclusions,” which were shared with Intuitive’s litigation counsel “to
make recommendations to [Reiter] and [Intuitive] management.” Upon learning of
Paknad’s second complaint, Intuitive again hired Smethurst to investigate. At the end of
the second investigation, Smethurst prepared another report, which was “issued . . . to the
Intuitive legal department” and “reviewed . . . with [litigation counsel] . . . to make
recommendations to [Reiter] and [Intuitive] management regarding whether [Paknad’s]
allegations amounted to violations of law, violations of [Intuitive] policy, or needed to
otherwise be addressed.”4
Paknad’s own evidence bolsters the trial court’s finding in favor of an
attorney-client privilege. Exhibit A to the Paknad declaration contains an e-mail from
Employee Relations representative Nancy L. Hill in response to Paknad’s first complaint,
in which Hill wrote: “I am responsible for investigating employee and compliance
complaints . . . . We take these issues seriously and have engaged Andrea Kelly
Smethurst, an attorney and investigator, to look into these issues.” Similarly, exhibit E
contains an e-mail from Employee Relations representative Debbie D. Lauber in response
to Paknad’s second complaint: “[Intuitive] takes very seriously its obligation to ensure
employees are protected from retaliation following the submission of a complaint and/or
closure of an investigation. We have engaged Andrea Kelly Smethurst, an outside,
independent investigator to conduct an investigation into your claims of retaliation.”
Independent of the Reiter declaration, these e-mails establish the preliminary facts
sufficient to support a prima facie showing of privilege—specifically, that Smethurst
“was an attorney hired by [Intuitive] to conduct an investigation of the charges of
discrimination.” (Wellpoint, supra, 59 Cal.App.4th at p. 123.)
4
In concluding that substantial evidence supports the trial court’s finding, we rely
only on portions of the Reiter declaration the trial court found to be admissible.
11
Because Intuitive has established “the facts necessary to support a prima facie
claim of privilege,” the burden shifts to Paknad to show that “ ‘the claimed privilege does
not apply or that an exception exists or that there has been an expressed or implied
waiver.’ ” (Wellpoint, supra, 59 Cal.App.4th at pp. 123, 124.) Paknad’s contention that
Smethurst “was not hired to perform legal work but as a neutral investigator” does not
suffice.
The Court of Appeal rejected a similar argument in Wellpoint. (Wellpoint, supra,59 Cal.App.4th at p. 121.) During discovery, plaintiff asked employer to produce a
prelitigation investigative report outside counsel had prepared in connection with
complaints plaintiff had made while employed at the company. (Id. at pp. 117–118.)
Employer refused on privilege grounds, and plaintiff moved to compel. (Ibid.) The trial
court granted the plaintiff’s motion to compel disclosure of outside counsel’s prelitigation
investigative report, holding that the attorney-client privilege did not apply because in
investigating plaintiff’s complaints, outside counsel was acting not as an attorney, but “as
the corporate investigator into plaintiff’s complaints of discrimination.” (See id. at
pp. 119, 118.)
The Court of Appeal reversed. (Wellpoint, supra, 59 Cal.App.4th at p. 121.) It
acknowledged a prior line of cases holding that the attorney-client privilege did not apply
when the “ ‘dominant purpose’ ” of the attorney-client relationship was not the provision
of legal services, but cautioned that “[r]eliance on these cases to support a blanket rule
excluding attorney investigations of employer discrimination from attorney-client and
work product protection is misplaced.” (Id. at p. 122.) The court concluded that the
employer had presented “facts necessary to support a prima facie claim of privilege”
because it was undisputed that outside counsel “was an attorney hired by [the] employer
to conduct an investigation of the charges of discrimination.” (Id. at p. 123.) This shifted
the burden to plaintiff to show that “ ‘the claimed privilege does not apply or that an
exception exists or that there has been an expressed or implied waiver.’ ” (Id. at p. 124.)
12
It was not enough to “simply assert[] . . . that [outside counsel] was engaged in a
fact-finding mission. At a minimum, [plaintiff] needed to present evidence concerning
his employer’s normal method of dealing with internal employment discrimination
complaints and whether they were routinely assigned to outside counsel.” (Ibid.)
Without such evidence, the plaintiff could not overcome the claim of privilege. (Ibid.)
So too, in City of Petaluma, the trial court found that, because the terms of
retention limited outside counsel’s role to that of a fact finder and did not extend to
providing legal advice to City, the attorney-client privilege did not apply to a prelitigation
report outside counsel prepared in response to the plaintiff’s prior complaint to the United
States Equal Employment Opportunity Commission. (City of Petaluma, supra, 248
Cal.App.4th at pp. 1030–1031, 1034.) In reversing, the Court of Appeal reasoned that
because “ ‘[t]he first step in the resolution of any legal problem is ascertaining the factual
background and sifting through the facts with an eye to the legally relevant[,]’ . . .
‘fact-finding which pertains to legal advice counts as “professional legal services” ’ ”
giving rise to “attorney-client and attorney work product protections.” (Id. at pp. 1034,
1036.) Outside counsel in City of Petaluma was “not merely a fact finder whose sole task
was to gather information and transmit it to the City, as [plaintiff] suggests. Instead, she
was expected to use her legal expertise to identify the pertinent facts, synthesize the
evidence, and come to a conclusion as to what actually happened.” (Id. at pp. 1034–
1035.) The reviewing court thus concluded that the “dominant purpose of [outside
counsel’s] representation was to provide professional legal services to the City Attorney
so that [the City Attorney], in turn, could advise the City on the appropriate course of
action.” (Id. at p. 1035.)
Wellpoint and City of Petaluma establish that to rebut a prima facie showing of
privilege, it is not enough that the attorney was acting as an investigator or fact finder.
Plaintiff must also show that the “dominant purpose” of the relationship between the
attorney and employer was something other than the provision of legal services.
13
(Wellpoint, supra, 59 Cal.App.4th at p. 122; City of Petaluma, supra, 248 Cal.App.4th at
p. 1035.) Wellpoint suggested that a plaintiff might make this showing by presenting
evidence that the employer “routinely assigned” to outside counsel the task of
investigating employee complaints, such that counsel’s work was more akin to “routine
fact-finding on behalf of the company’s personnel department rather than legal work.”
(Wellpoint, at p. 124.) City of Petaluma suggested that such a showing could be possible
if plaintiff presented evidence that the attorney’s role was solely limited to gathering and
transmitting information, without any use of legal expertise. (City of Petaluma, at
pp. 1034–1035.)
Such is not the case here. The trial court found that “the dominant purpose of the
representation of Smethurst was to provide legal services to [Intuitive] so that [Intuitive],
with further consultation with outside employment counsel, could determine an
appropriate course of action [as to Paknad’s complaints].” Substantial evidence supports
this finding. Intuitive hired Smethurst for her experience both as an “attorney and
employment investigator.” The scope of Smethurst’s duties extended beyond gathering
and transmitting information, and included conducting two “privileged investigation[s],”
and “provid[ing] her recommendations to the [c]ompany for further [decisionmaking].”
Smethurst provided her second investigative report directly “to the Intuitive legal
department,” and the findings and recommendations contained in that report were shared
with Intuitive management and litigation counsel, “in order to make recommendations
to . . . [Intuitive] management regarding whether [Paknad’s] allegations amounted to
violations of law, violations of [Intuitive] policy, or needed to otherwise be addressed.”
In its response to plaintiff’s form interrogatory No. 12.6 relating to the reports, Intuitive
represented that “[b]oth reports were the result of investigations conducted at the
direction of counsel, for the purpose of analyzing potential legal risk and preparing for
possible litigation, such as the pending litigation.” This is the essence of what
14
“provid[ing] legal services” entails. (City of Petaluma, supra, 248 Cal.App.4th at
p. 1035.)
Because Smethurst’s investigative duties were inextricably linked to the provision
of legal services and legal advice, we agree with the trial court that an attorney-client
relationship exists between Smethurst and Intuitive, such that the attorney-client privilege
and work product doctrine applied.
C. Intuitive Has Waived the Privilege by Placing the Smethurst Investigations at
Issue
Paknad next argues that even if the attorney-client privilege applied, Intuitive has
waived it by putting the “adequacy of the investigation[s] directly at issue” through its
assertion of the avoidable consequences defense. Specifically, Paknad argues that by
asserting it had policies and procedures in place “to promptly prevent and correct any
inappropriate conduct,” and alleging Paknad “unreasonably failed to take advantage” of
those policies and procedures, Intuitive has directly placed at issue questions relating to
the investigations’ scope and adequacy.
We agree, and conclude that Intuitive’s assertion of the avoidable consequences
defense, as well as its response to plaintiff’s form interrogatory No. 15.1, have placed the
Smethurst investigations directly at issue.
1. Intuitive Has Placed the Smethurst Investigations at Issue
A waiver of the attorney-client privilege occurs upon a showing that “ ‘the client
has put the otherwise privileged communication directly at issue and that disclosure is
essential for a fair adjudication of the action.’ ” (Wellpoint, supra, 59 Cal.App.4th at
p. 128.) Thus, “[i]f a defendant employer hopes to prevail by showing that it investigated
an employee’s complaint and took action appropriate to the findings of the investigation,
then it will have put the adequacy of the investigation directly at issue, and cannot stand
on the attorney-client privilege or work product doctrine to preclude a thorough
examination of its adequacy.” (Ibid.)
15
Intuitive denies that its assertion of the avoidable consequences defense placed the
Smethurst investigations at issue, volunteering two explanations of this defense not
apparent from its answer. First, Intuitive maintains that this defense “was focused on
[p]laintiff’s failure to take advantage of [Intuitive’s] complaint procedure with respect to
many allegations she has made in the litigation but did not make while employed by
Intuitive.” Second, as to any allegations Intuitive would concede Paknad made while in
its employ, Intuitive says its defense is “that it actually responded appropriately to them,
without regard to what is contained in its outside counsel’s analyses” and that it “does
not seek to hide behind its outside counsel’s analyses as a shield in the event a fact finder
decides Intuitive’s response was inadequate.” (Boldface omitted.) We address each of
these defense theories in turn.
As to Intuitive’s first contention—that the avoidable consequences defense was
focused only on claims Paknad did not raise while at Intuitive—Intuitive supplies no
meaningful rubric by which to differentiate between what it characterizes as reported
versus unreported claims.5 While Intuitive contends it had “thoroughly investigated
every allegation that [p]laintiff presented,” contemporaneous notes from Paknad and the
company suggest this is far from clear. For example, at the end of the first investigation
in June 2018, Intuitive informed Paknad that the focus of the investigation was limited to
Paknad’s transition within the company, as Paknad had requested. Paknad disputed this
characterization from the outset, asserting that her transition “was just one element”
among “ongoing issues” such as “bullying, compliance concerns and disparate
treatment.” Paknad expressed similar dissatisfaction with the scope of the second
investigation, repeatedly advising Intuitive that many of her claims were “not properly
5
In its opposition to Paknad’s motion to compel filed in the trial court, Intuitive
noted that “some of [p]laintiff’s discovery responses . . . include summaries of a number
of allegations that were not raised by [p]laintiff while she was at Intuitive.” However,
Intuitive did not further specify which of the allegations Paknad failed to raise.
16
explored.” Intuitive appeared to acknowledge this dispute in correspondence to Paknad
dated December 28, 2018, in which general counsel Reiter wrote: “It appears that we
disagree about the adequacy and findings of the first two investigations.” Given this
threshold dispute over whether Intuitive’s failure to address Paknad’s allegations arose
out of Paknad’s failure to report them, or Smethurst’s failure to investigate them even
though they were reported, we do not believe Intuitive’s avoidable consequences defense
can be meaningfully limited to Paknad’s unreported claims. This is particularly so here,
where the alleged misconduct began as early as 2014 and persisted until Paknad’s
termination in 2018. Such a continuous course of conduct cannot be readily parsed into
discrete episodes.
Intuitive’s second argument—that as to the claims Paknad did raise, Intuitive will
not rely on the Smethurst reports but only on the propriety of its response independent of
counsel’s findings—presumes against logic and the record that its response can be said to
have been independent of the very investigation it commissioned to inform that response.
As Reiter declared, Intuitive engaged Smethurst “to make recommendations
to . . . [Intuitive] management” about how to respond. Intuitive cannot at once claim
attorney-client privilege and disavow any interrelationship between the investigative
findings it commissioned and the response it ultimately chose. If Intuitive chose to
disregard the findings of the investigations it commissioned, those findings would be
relevant to the claimed adequacy of its response; likewise, if it chose to accept and act on
the findings made, the adequacy of its response is enmeshed with the adequacy of those
investigations.
As the trial court noted in denying the motion to compel, “[i]t is unclear what
[Intuitive] refers to as reasonable care to prevent and correct inappropriate conduct, other
than perhaps the written warning issued” due to the investigations. And while the trial
court ultimately surmised that Intuitive must have other “anti-harassment,
anti-discrimination and anti-retaliation policy, and complaint procedure . . . in place prior
17
to and independent of the investigation,” we do not defer to speculation unsupported by
any evidence, substantial or otherwise. To the contrary, the record makes clear that the
Smethurst investigations represent Intuitive’s first and only response to Paknad’s
harassment, discrimination, and retaliation claims. This is evidenced by the following:
(1) Intuitive immediately referred both Paknad’s complaints to Smethurst for
investigation with no intervening process in between, (2) Intuitive relied on the Smethurst
reports to reach its purportedly independent findings, and (3) to the extent Intuitive took
corrective actions in response to Paknad’s complaints, it did so in the immediate
aftermath of, and as a direct result of, the Smethurst investigations.
Despite disavowing use of the reports in the trial court, Intuitive responded to
plaintiff’s form interrogatory No. 15.1 (requiring it to set forth the bases for its
affirmative defenses) by relying on the Smethurst investigations and touting their
thoroughness and independence: “Defendant . . . thoroughly investigated every
allegation that [p]laintiff presented by hiring an independent, outside investigator to
conduct two investigations, interview numerous witnesses (some of which she
interviewed several times), and review a large volume of documentary evidence . . . .” In
Wellpoint, the court held that a defendant may waive the privilege through discovery
responses “indicat[ing] the possibility of a defense based on thorough investigation and
appropriate corrective response.” (Wellpoint, supra, 59 Cal.App.4th at p. 129.) Because
Intuitive’s response to plaintiff’s form interrogatory No. 15.1 confirms the likelihood of
such a defense, we conclude that Intuitive has placed the Smethurst investigations at
issue.
The vigor of Intuitive’s commitment to abstain from express reliance on the
content of the investigative reports is clear; it is also clear that Intuitive is as committed to
relying on the fact of the investigations—and by implication their adequacy— as
evidence that its response was diligent and its corrective action reasonable. And if
Intuitive may introduce evidence that it “thoroughly investigated every allegation that
18
[p]laintiff presented,” then fairness dictates that Paknad be given access to the reports and
investigative materials as well, so that she has equal opportunity to test those claims of
thoroughness. (Jones, supra, 12 Cal.5th at p. 363 [“[A]llowing one party to rely on a
document to establish key facts while simultaneously shielding that same document from
the other side works an unfair adversarial advantage”].) This is particularly important in
a case like this, where the alleged misconduct is extensive and continuous, and
contemporaneous evidence demonstrates that the scope and adequacy of the
investigations have been a central point of contention between the parties since before
litigation commenced.
Accordingly, we conclude that Intuitive has waived the attorney-client privilege as
to the Smethurst investigations by placing the investigations directly at issue.6
2. Extent of Waiver
Having concluded that Intuitive waived the attorney-client privilege by placing the
Smethurst investigations at issue, we next address the extent of that waiver. Intuitive’s
privilege logs set forth three categories of items relating to the investigations: (1) the
Smethurst reports themselves, (2) Smethurst’s notes from interviews with employees
conducted in connection with the investigations, and (3) correspondence between
Smethurst and Intuitive management regarding the investigations. We do not see a
meaningful basis to distinguish between these categories of materials, when each can be
expected to contain factual information Smethurst collected during the investigative
process. Indeed, facts gathered during interviews with employees or in discussions with
management may be just as imperative as the reports themselves in informing the scope
and adequacy of the investigations. For example, if contemporaneous notes from
Smethurst’s interviews of Paknad show that Paknad reported instances of
6
Because we conclude that Intuitive has placed the Smethurst investigations at
issue, we do not consider Paknad’s alternative argument that the company has also
waived the privilege through disclosure, pursuant to section 912 of the Evidence Code.
19
discrimination/harassment that Smethurst did not investigate or include in the final
reports, that omission would undermine Intuitive’s argument that Paknad unreasonably
failed to avail herself of Intuitive’s policies and procedures to prevent
discrimination/harassment. By contrast, if those same notes revealed that Smethurst
thoroughly investigated and reported each of the allegations Paknad brought to her
attention during the investigative process, then Paknad’s claim that many of her claims
were “not properly explored” would lose much of its force.
To be sure, in ordering disclosure of the reports and related investigative materials,
we are mindful that “[t]he work product rule in California creates for the attorney a
qualified privilege against discovery of general work product and an absolute privilege
against disclosure of writings containing the attorney’s impressions, conclusions,
opinions or legal theories.” (BP Alaska Exploration, Inc. v. Superior Court (1988)
199 Cal.App.3d 1240, 1250; see also Code Civ. Proc., § 2018.030, subd. (a) [“A writing
that reflects an attorney’s impressions, conclusions, opinions, or legal research or theories
is not discoverable under any circumstances”].) In its privilege logs, Intuitive describes
the Smethurst reports as “[i]nvestigation report[s] prepared by outside counsel
summarizing outside counsel’s findings, mental impressions, and conclusions regarding
[p]laintiff’s allegations of discrimination and retaliation.” Based on this description, at
least some aspect of the reports may be absolutely privileged under section 2018.030(a).
In addition, Smethurst’s interview notes and communications with Intuitive management
are also likely to contain absolutely privileged work product material. Therefore, upon
an adequate preliminary showing that disclosure of the reports or investigative materials
would reveal Smethurst’s “impressions, conclusions, opinions, or legal research or
theories” (§ 2018.030(a)), the trial court may determine, “ ‘by making an in camera
inspection if necessary, whether absolute work product protection applies to some or all
of the material.’ ” (Jones, supra, 12 Cal.5th at p. 366.) While an in-camera review
would not be appropriate to determine the threshold question of whether a privilege
20
existed, our conclusion that the privilege has been waived still allows the trial court to
conduct an in camera review “to determine if some protection is warranted
notwithstanding the waiver.” (See Costco, supra, 47 Cal.4th at p. 740.)
III. DISPOSITION
Let a peremptory writ of mandate issue directing the trial court to vacate the
November 28, 2022 order denying Paknad’s motion to compel insofar as it relates to the
Smethurst reports and related investigative materials, and to enter a new order granting
the motion. Prior to disclosing the reports and investigative materials, and upon a
preliminary showing under Code of Civil Procedure section 2018.030, subdivision (a),
the trial court may conduct an in camera review of the materials to determine “if some
protection is warranted notwithstanding the waiver [of the attorney-client privilege].”
(See Costco Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 740; People v.
Superior Court (Jones) (2021) 12 Cal.5th 348, 366.) Upon completion of the review, the
trial court shall disclose to Paknad any portions of the Smethurst investigations it deems
to not be protected under the attorney work product rule, or another applicable privilege.
Upon issuance of the remittitur, the temporary stay order is vacated.
21
_____________________________________
LIE, J.
WE CONCUR:
_____________________________________
GREENWOOD, P. J.
_____________________________________
WILSON, J.
Paknad v. Superior Court
H050711