Southern California Edison Co. v. Super. Ct. ( 2024 )

Filed 5/31/24
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
SOUTHERN CALIFORNIA B333798
EDISON COMPANY,
(Los Angeles County
Petitioner, Super. Ct. No. 21STCV18308)
v.
THE SUPERIOR COURT OF
LOS ANGELES COUNTY,
Respondent;
21st CENTURY INSURANCE
COMPANY et al.,
Real Parties in Interest.
ORIGINAL PROCEEDING; petition for writ of mandate.
Elihu M. Berle, Judge. Petition granted with directions.
Hueston Hennigan, John C. Hueston, Douglas J. Dixon,
Padraic Foran, Brandon Marsh; Southern California Edison
Company, Belynda B. Reck, Patricia A. Cirucci and Brian
Cardoza for Petitioner.
No appearance for Respondent.
Berger Kahn, Craig S. Simon; Grotefeld Hoffman, Adam
Romney; Engstrom, Lipscomb & Lack and Gregory P. Waters for
Real Parties in Interest.
____________________________
INTRODUCTION
California law protects the work product of attorneys and
those assisting them in investigating facts related to providing a
client legal advice. This case requires that we decide whether a
client’s statutory obligation to publicly report certain events
trumps the protection applicable to attorney work product
generated during an internal investigation into facts concerning
the reportable event.
Real parties in interest (plaintiffs) are insurance companies
that paid policyholders for losses resulting from a conflagration
known as the Creek Fire. Plaintiffs claim an arc from the electric
powerlines of Southern California Edison Company (SCE) caused
the fire and have sued SCE under a subrogation theory to recover
their payments to insureds.
During discovery in the subrogation case, SCE withheld
certain documents that it asserted were generated during an
attorney initiated and directed internal investigation into the
cause of the Creek Fire. Plaintiffs moved to compel, arguing the
attorney-client privilege and attorney work product doctrine did
not exempt these documents from production. Among other
things, plaintiffs argued that SCE could not assert privilege and
withhold documents because the primary reason SCE conducted
the investigation was to comply with state law requiring it to
publicly report any involvement it had in causing the fire. The
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trial court agreed the dominant purpose of the investigation was
to comply with public reporting requirements, held the
documents thus were not privileged, and compelled production.
We conclude the trial court’s order improperly invaded the
protection afforded by the attorney work product doctrine. Even
where the dominant purpose of an attorney directed internal
investigation is to comply with a client’s public reporting
requirement, attorney work product generated in connection with
gathering facts to assist counsel in advising the client on how to
comply with that statutory or regulatory reporting requirement
remains protected. As plaintiffs have not shown grounds for
production of their adversary’s work product, the trial court erred
in compelling its production. Our conclusion regarding the
attorney work product doctrine is dispositive in this matter, and
therefore we do address, and express no opinion on, whether the
order also violated the attorney-client privilege.
FACTUAL AND PROCEDURAL BACKGROUND
A. Legal Obligation of Utilities to Investigate and
Report Certain Fires to the Public Utilities
Commission
Public Utilities Code section 315 requires the Public
Utilities Commission (PUC or commission) to “investigate the
cause of all accidents occurring within this State upon the
property of any public utility or directly or indirectly arising from
or connected with its maintenance or operation, resulting in loss
of life or injury to person or property and requiring, in the
judgment of the commission, investigation by it.” The statute
also requires public utilities to “file with the commission, under
such rules as the commission prescribes, a report of each accident
so occurring.” (Pub. Util. Code, § 315.)
3
In turn, PUC General Order 95, section 1, rule 17 (PUC
rule 17) requires utilities such as SCE to “establish procedures
for the investigation of major accidents and failures for the
purpose of determining the causes and minimizing the possibility
of recurrence.” The rule defines “major accidents and failures” as
“[i]ncidents associated with utility facilities which cause property
damage estimated at or about the time of the incident to be more
than $50,000” and “[i]ncidents resulting from electrical contact
which cause personal injury which require hospitalization
overnight, or result in death.” (Ibid.)
PUC also requires utilities to notify it within two hours of
an incident during normal working hours or within four hours
outside of normal working hours, and to submit, within 20
business days, “a written account of the incident which includes a
detailed description of the nature of the incident, its cause and
estimated damage.” (Pub. Util. Com. Final Resolution E-4184
(Aug. 21, 2008) Decision No. 06-04-055, App. B.) PUC defines
“ ‘[r]eportable incidents’ ” as “those which: (a) result in fatality or
personal injury rising to the level of in-patient hospitalization
and attributable or allegedly attributable to utility owned
facilities; or (b) are the subject of significant public attention or
media coverage and are attributable or allegedly attributable to
utility facilities; or (c) involve damage to property of the utility or
others estimated to exceed $50,000.” (Ibid.) PUC rule 17
provides, “Nothing in this rule is intended to extend, waive, or
limit any claim of attorney client privilege and/or attorney work
product privilege.”
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B. The Creek Fire and Events Leading to Plaintiffs’
Lawsuit Against SCE
The Creek Fire ignited on December 5, 2017 in Los Angeles
County, and damaged multiple properties before being
extinguished. On December 11 and 12, 2017, counsel for several
of the plaintiffs sent evidence preservation letters to SCE
asserting that they believed SCE’s equipment likely contributed
to the ignition and spread of the fire. The Department of
Forestry and Fire Protection (CalFire) notified SCE on
December 14, 2017 that its investigation of the fire’s area of
potential origin did not include SCE facilities. CalFire
nonetheless requested SCE provide information regarding some
of its facilities and SCE responded.
The U.S. Department of Agriculture Forest Service (USFS)
investigated and prepared a report dated January 13, 2018, in
which it concluded the cause of the fire was Los Angeles
Department of Water and Power (LADWP) electrical
transmission lines.1 In 2018, a lawsuit was filed against LADWP
for allegedly causing the Creek Fire and, on or about July 21,
2020, a subpoena was served on SCE seeking data regarding
specific elements of SCE’s electrical system in the area of the fire,
including what the parties call the “Lopez Circuit.”
Although the details are not part of the record, it appears
that in June 2019 SCE was sued for contributing to the Creek
Fire’s ignition and spread. SCE submitted an accident report to
1 According to plaintiffs, this report was not made public
until April 2020. The United States later sued SCE in 2023 for
damage to national forest lands, fire suppression costs, and other
damages, alleging that SCE’s negligence caused the Creek Fire.
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PUC regarding the fire on December 11, 2020—just over three
years after the fire began and well beyond the 20 business days
required by PUC. Scott Hayashi, a senior advisor in SCE’s
claims department, wrote in the report that it was being made
“under Public Utilities Code [s]ection 315 because litigation has
been filed and served on SCE in which it is alleged that damage
to third-party property is attributable to SCE facilities.” The
report indicated that USFS initially investigated the cause and
origin of the fire and determined that SCE facilities were not
involved. The report stated, “Given the allegations in the
litigation, SCE is evaluating activity on the Lopez [C]ircuit,
including a branch line fuse operation outside the vicinity of the
origin of the fire and elevated amperage readings on the circuit
on December 5, 2017.”
Plaintiffs filed their initial subrogation complaint against
SCE on May 14, 2021. A master subrogation complaint filed on
April 18, 2022, which plaintiffs joined, alleged that an electrical
arc on SCE’s Lopez Circuit “ignite[d] nearby trees, brush, and
vegetation giving rise to the Creek Fire.”
C. SCE’s Withholding of Documents from Production
During discovery in the subrogation case, SCE withheld
certain documents, primarily emails, which it claimed were
created as part of an investigation of the Creek Fire initiated by
its in-house counsel. SCE asserted the documents were protected
by the attorney-client privilege and the attorney work product
doctrine. A subset of these documents (108 in total), dated from
between December 7, 2017 and June 29, 2021, are relevant here.
The documents at issue include emails between employees in
SCE’s claims department (Claims employees) on which no
attorney was copied, emails between Claims employees and SCE
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employees in other non-legal departments, and emails that did
not include any Claims employees or attorneys. Also included are
two documents purportedly drafted or edited by Hayashi, and a
third described only as an “[e]mail or document reflecting
communication with SCE [l]egal.”
D. Plaintiffs’ Motion to Compel
Plaintiffs moved to compel production of these 108
documents. Plaintiffs contended that the dominant purpose of
SCE’s investigation was to comply with its legal reporting
obligation to PUC, and thus the investigation could not be
privileged because PUC mandated reports are public. Plaintiffs
further argued that Claims employees typically filed incident
notifications with PUC without legal review, and SCE attorneys
generally did not supervise Claims employees as those employees
worked mostly on matters where litigation was not anticipated.
Noting that SCE was not sued until June 2019, plaintiffs also
argued that it was “not plausible” that SCE’s investigation
(which began shortly after the fire started) was in anticipation of
litigation and instead was to respond to requests from
government agencies such as USFS, CalFire, and PUC.
Plaintiffs contended that SCE’s failure to produce the
documents thwarted their efforts to discover information showing
SCE knew it had caused the Creek Fire, had failed to comply
with its PUC reporting obligation, and did not “accurately
respond to official investigations of the origin and cause of the
Creek Fire” by USFS, PUC, and CalFire.
E. SCE’s Opposition to the Motion to Compel
SCE opposed the motion to compel, contending that the
documents “were created as part of the SCE [l]aw [d]epartment’s
investigation into the Creek Fire, for the purpose of rendering
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legal advice and in anticipation of litigation.” SCE further
disputed that it had withheld any relevant information from
CalFire, PUC, or USFS.
Brian Cardoza, SCE’s lead claims trial attorney, submitted
a declaration in which he averred that, on December 5, 2017, he
“directed SCE’s [c]laims [d]epartment to conduct a privileged and
confidential internal investigation of the Creek Fire for the
purpose of assessing SCE’s potential legal liability in anticipation
of future litigation.” According to Cardoza and other SCE
witnesses, SCE’s claims department and its law department are
both part of SCE’s “[l]egal [o]rganization.” Cardoza stated that
he initiated “th[e] investigation in order to facilitate the provision
of legal advice” on several topics, including “potential regulatory
action related to the fire” and “evaluations of potential company
risk and monetary liability in litigation or through regulatory
action.”
Cardoza declared, “SCE is routinely sued after a wildfire
incident even when SCE facilities are not involved in the ignition.
Accordingly, SCE’s attorneys regularly undertake confidential
and privileged investigations after fires in order to procure legal
advice in anticipation of litigation.” SCE also submitted copies of
the evidence preservation letters sent to SCE by plaintiffs’
attorneys within a week of the fire which asserted that SCE’s
equipment either “likely” or “may have” “contributed to the
ignition and spread of” the Creek Fire.
Cardoza averred that he “directed the [c]laims
[d]epartment to report all investigation results to Leon Bass,
SCE [d]irector and [m]anaging [a]ttorney [c]laim [l]itigation.” He
further averred that he had reviewed all of the communications
at issue and “underst[ood] that each . . . was made as part of and
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in furtherance of the investigation that SCE’s [l]aw [d]epartment
directed the [c]laims [d]epartment to perform in anticipation of
litigation.” According to Cardoza, “During the Creek Fire
investigation, the [c]laims [d]epartment worked with the [l]aw
[d]epartment and outside counsel to help gather facts,
communicate with subject-matter experts, and interpret technical
data and information, all to facilitate the attorneys’ rendering of
legal advice.” Cardoza stated that he “regularly spoke with
Robert Ramos, Scott Hayashi, and other members of the [c]laims
[d]epartment regarding their findings.”
Hayashi averred in a declaration, “The [c]laims
[d]epartment regularly conducts investigations at the request of
counsel and on the [l]aw [d]epartment’s behalf, in order to assist
attorneys in the rendering of legal advice, and in anticipation of
litigation after wildfires.” Hayashi stated that “[b]eginning on
December 5, 2017,” Cardoza directed the claims department to
conduct such an investigation regarding the Creek Fire, and he
described the role of the claims department consistent with
Cardoza’s declaration. Hayashi testified at deposition that he
spoke in the presence of a lawyer within 10 days after the fire
began but could not recall which lawyer. Hayashi was a sender
or recipient on 102 of the 108 documents at issue, and averred
that all the communications were made “as part of and in
furtherance of the investigation.”
Ramos, “the highest-ranking employee in” the claims
department, authored a declaration mirroring Hayashi’s. Ramos
testified at deposition that he is not a technical expert concerning
electrical systems, so he relies on “subject matter experts” to
obtain information.
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SCE contended that the documents were attorney-client
privileged and entitled to both absolute and qualified protection
under the attorney work product doctrine. It asserted that its
obligation to report to PUC was irrelevant, noting that PUC rule
17 preserved attorney-client privilege and work product
protections with respect to a utility’s investigation into a fire. It
also argued that, even if the investigation related to its disclosure
obligations, the attorney-client privilege and work product
doctrine could still apply. SCE further contended that the
attorney-client privilege and attorney work product doctrine
could protect communications between non-attorneys.
F. The Court’s Ruling and SCE’s Writ Petition
On November 17, 2023, after hearing oral arguments, the
trial court granted the motion to compel. As to the claim of
attorney-client privilege, the court noted that none of the
documents was sent to or from SCE counsel. As for the attorney
work product claim, the court concluded “SCE has not shown that
the documents at issue involve opinions, communications,
impressions, conclusions, or legal research or theories of any
attorney,” stating, “All that has been shown is that these
documents involve communications and impressions among
investigators or employees, that is, non-attorneys.” The court
also found that SCE had not “adequately establish[ed]” that the
Claims employees and other SCE employees were acting as
agents for SCE counsel. It accepted plaintiffs’ argument that the
investigation’s dominant purpose was not legal advice, stating
“[it] defies logic to accept that the dominant purpose of [the SCE
employees’] investigation into the Creek Fire was simply to aid
counsel in advising SCE of its legal rights and responsibilities
and not a critical business decision to prevent further chaos to its
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customers, [and] most importantly, to comply with its legal
requirement [as a] highly-regulated entity, that is, to determine
the cause of the fire and minimize the possibility of reoccurrence.”
While acknowledging that the withheld documents “may have
relevance to some future yet still nonexistent lawsuit” when they
were created, the court found the documents were related to
“legal compliance,” which it characterized as “a business
purpose,” and which, in the court’s view, “dominate[d] over
anticipated litigation.”
The court found the documents at issue discoverable,
stating that they concerned “circuit irregularities [that] would no
doubt give a clear picture as to the causation of the Creek Fire,
the scope of liability, and ultimately, as the sequence of events
suggest, that SCE made a deliberate decision at various stages of
its investigation to sidestep unfavorable evidence and/or allow
blame to be placed on the LADWP.”
SCE thereafter filed a petition for writ of mandate or
prohibition in this court, contending the trial court erred in
granting plaintiffs’ motion to compel. We issued an order to show
cause why a peremptory writ of mandate should not issue
directing the trial court to vacate its order and enter a new order
denying plaintiffs’ motion to compel, and plaintiffs and SCE fully
briefed the question.2
2 Plaintiffs did not verify their response to the writ petition,
and SCE contends that we should therefore strike plaintiffs’
return. Because plaintiffs’ response is not verified, “all well-
pleaded and verified allegations of the writ petition are accepted
as true. [Citations.]” (Bank of America, N.A. v. Superior Court
(2013) 212 Cal.App.4th 1076, 1084.) However, we decline to
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DISCUSSION
A. Standard of Review
“ ‘[W]here the petitioner seeks relief from a discovery order
that may undermine a privilege, we review the trial court’s order
by way of extraordinary writ.’ [Citation.]” (Doe 2 v. Superior
Court (2005) 132 Cal.App.4th 1504, 1515.)
“A trial court’s determination of a motion to compel
discovery is reviewed for abuse of discretion. [Citation.] An
abuse of discretion is shown when the trial court applies the
wrong legal standard. [Citation.] However, when the facts
asserted in support of and in opposition to the motion are in
conflict, the trial court’s factual findings will be upheld if they are
supported by substantial evidence. [Citations.]” (Costco
Wholesale Corp. v. Superior Court (2009) 47 Cal.4th 725, 733
(Costco).) “[W]e apply independent review to the trial court’s
conclusions as to the legal significance of the facts.” (City of
Petaluma v. Superior Court (2016) 248 Cal.App.4th 1023, 1031.)
B. The Attorney Work Product Doctrine
California law shields the “work product” of an attorney
from disclosure in litigation. The legislative policy for affording
this protection is to “[p]reserve the rights of attorneys to prepare
cases for trial with that degree of privacy necessary to encourage
them to prepare their cases thoroughly and to investigate not
only the favorable but the unfavorable aspects of those cases”
strike plaintiffs’ response and will address the merits of SCE’s
petition. (See County of San Bernardino v. Superior Court (1994)
30 Cal.App.4th 378, 382, fn. 6 [addressing the merits of a writ
petition despite the “ ‘responsive brief’ ” not being a proper return
to the court’s order to show cause].)
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(Code Civ. Proc.,3 § 2018.020, subd. (a)) and “[p]revent attorneys
from taking undue advantage of their adversary’s industry and
efforts” (id., subd. (b)). To that end, subdivision (a) of section
2018.030 describes what is known as “absolute” work product
protection, while subdivision (b) describes “qualified” protection.
“A writing that reflects an attorney’s impressions, conclusions,
opinions, or legal research or theories is not discoverable under
any circumstances.” (Id., subd. (a).) Any attorney work product
that does not reflect counsel’s impressions, conclusions, opinions,
or legal research or theories “is not discoverable unless the court
determines that denial of discovery will unfairly prejudice the
party seeking discovery in preparing that party’s claim or defense
or will result in an injustice.” (Id., subd. (b).)
“[T]he Legislature in enacting section 2018.030 did not
define ‘work product’ and instead left the term open to judicial
interpretation.” (Coito v. Superior Court (2012) 54 Cal.4th 480,
494 (Coito).) Courts have defined attorney work product as “the
product of the attorney’s ‘ “effort, research, and thought in the
preparation of his client’s case. It includes the results of his own
work, and the work of those employed by him or for him by his
client, in investigating both the favorable and unfavorable
aspects of the case, the information thus assembled, and the legal
theories and plan of strategy developed by the attorney—all as
reflected in interviews, statements, memoranda, correspondence,
briefs, and any other writings reflecting the attorney’s
‘impressions, conclusions, opinions, or legal research or theories’
and in countless other tangible and intangible ways.” ’ ” (Meza v.
3 All unspecified statutory references are to the Code of
Civil Procedure.
13
H. Muehlstein & Co., Inc. (2009) 176 Cal.App.4th 969, 977,
quoting BP Alaska Exploration, Inc. v. Superior Court (1988) 199
Cal.App.3d 1240, 1253-1254, fn. 4; see Citizens for Ceres v.
Superior Court (2013) 217 Cal.App.4th 889, 911 [“Work produced
by an attorney’s agents and consultants, as well as the attorney’s
own work product, is protected by the attorney work product
doctrine.”].)
Work product protection applies when an attorney acts in a
litigation or “nonlitigation legal capacity.” (Rumac, Inc. v.
Bottomley (1983) 143 Cal.App.3d 810, 815-816.) Further, “the
work product privilege is not limited to documents prepared in
anticipation of litigation but also applies to the work product of
an attorney generated in his [or her] role as counselor.” (Aetna
Casualty & Surety Co. v. Superior Court (1984) 153 Cal.App.3d
467, 478-479.) The privilege can also apply where an attorney is
fact-finding, 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.’ [Citation.]”
(City of Petaluma v. Superior Court, supra, 248 Cal.App.4th at
p. 1034.)
“The work product privilege is held by the attorney, not the
client.” (Curtis v. Superior Court (2021) 62 Cal.App.5th 453,
468.) An attorney seeking to invoke work product protection has
the burden to show that materials are either absolute or qualified
work product. (Coito, supra, 54 Cal.4th at pp. 486, 495-496; BP
Alaska Exploration, Inc. v. Superior Court, supra, 199 Cal.App.3d
at p. 1252.) If material is entitled to only qualified work product
protection, the party seeking the material “has the burden of
establishing that denial of disclosure will unfairly prejudice the
party in preparing its claim or defense or will result in an
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injustice.” (Coito, supra, 54 Cal.4th at p. 499; Citizens for Ceres v.
Superior Court, supra, 217 Cal.App.4th at p. 912.)
A trial court “may not require disclosure of information
claimed to be . . . [absolute] attorney work product” to rule on the
claim. (Evid. Code, § 915, subd. (a).) However, a court can
require an in camera review of materials claimed to be protected
as qualified work product where it is unable to determine the
discoverability of those materials without such a review. (Id.,
subd. (b).)
C. The Trial Court Abused its Discretion in Ruling that
the Documents Were Not Entitled to At Least
Qualified Attorney Work Product Protection
The documents at issue, which SCE provided substantial
evidence were prepared as part of an attorney led internal
investigation, are the type of materials typically entitled to work
product protection. Our Supreme Court’s decision in Coito is
instructive. The court addressed whether witness statements
taken by investigating agents on behalf of the state agency’s
attorney were protected work product. (Coito, supra, 54 Cal.4th
at pp 487, 500.) The court first held that a witness statement
obtained from an interview, whether conducted by an attorney
“or by an attorney’s agent at the attorney’s behest” (id. at p. 494),
“may, in some instances, reveal the ‘impressions, conclusions,
opinions, or legal research or theories’ of the attorney and thus be
entitled to absolute protection.” (Id. at p. 495, quoting
§ 2018.030, subd. (a).) The court then held that, even where
absolute protection is inapplicable, such a witness statement “is,
as a matter of law, entitled to at least qualified work product
protection.” (Coito, supra, at p. 497.) In reaching this latter
conclusion, the court reasoned that leaving such documents
15
unprotected would “undermine[ ] the Legislature’s policy to
‘[p]revent attorneys from taking undue advantage of their
adversary’s industry and efforts’ ” (id. at p. 496, quoting
§ 2018.020, subd. (b)), and “impede the Legislature’s intent ‘to
encourage [attorneys] to prepare their cases thoroughly and to
investigate not only the favorable but the unfavorable aspects of
those cases’ ” (Coito, supra, at p. 496, quoting § 2018.020, subd.
(a)).
Here, SCE adduced evidence that its in-house counsel
directed Claims employees to obtain information from employees
referred to as “subject-matter experts” in other departments.
Communications from these subject-matter experts to Claims
employees would contain information regarding the Creek Fire
and/or SCE’s equipment, and thus be witness statements like
those at issue in Coito. Under Coito, these communications, as
well as other communications and documents relating to the
interview process, are at least entitled to qualified work product
protection.
We discern two grounds for the trial court’s ruling that the
work product doctrine did not apply: that SCE failed to establish
that its Claims employees were agents of SCE counsel, and that
the dominant purpose of the investigation was compliance with
SCE’s legal obligation under Public Utilities Code section 315 and
PUC rule 17 to investigate the fire and report on it to PUC. The
first finding is not supported by substantial evidence, and the
conclusions the court drew from its second finding are legally
flawed.
1. Agency
It is well-established that the work product doctrine
“ ‘ “includes . . . the work of those employed by [an attorney] or for
16
him by his client, in investigating both the favorable and
unfavorable aspects of the case.” ’ ” (Meza v. H. Muehlstein &
Co., Inc., supra, 176 Cal.App.4th at p. 977.) SCE submitted
multiple declarations establishing that attorney Cardoza
instructed the claims department to investigate the cause of the
Creek Fire to assist in providing legal advice to SCE, and that
the documents at issue were “part of and in furtherance of” that
investigation. Other documents on which attorneys were copied
and as to which plaintiffs did not move to compel corroborated
attorney involvement in this investigation. Plaintiffs did not
adduce any conflicting evidence, and the court’s ruling does not
identify any.
In support of the court’s ruling, plaintiffs point to evidence
they claim demonstrates that “the [c]laims [d]epartment
investigates a wide variety of matters, including customer
complaints and job safety claims, where there is no anticipation
of litigation.” The evidence they cite—excerpts from a deposition
Ramos provided in 2013 in a different lawsuit—does not support
their assertion. More importantly, even if Claims employees do
typically work on matters where litigation is not anticipated, that
does not lead to the reasonable inference that they never handle
other assignments where litigation is anticipated.
Plaintiffs also claim “SCE’s general counsel does not
actively supervise [c]laims [d]epartment investigations,” citing
Ramos’s 2013 deposition testimony that one SCE attorney named
Swartz (who was not a declarant in opposition to the motion to
compel) did not “actively” supervise such investigations. This
2013 statement in another case does not create a reasonable
inference that four years later an attorney other than Swartz
(here, Cardoza) and other SCE attorneys would not have
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supervised Claims employees in a specific, potentially significant
matter. Nor do plaintiffs explain what they mean by “actively”
supervise or identify any requirement that an attorney must
exercise a particular level of supervision over an investigation for
work product protection to apply.
Plaintiffs also contend they adduced evidence that “SCE’s
claims personnel are responsible for filing notifications with the
PUC ‘as a matter of practice’ without involving legal counsel, and
generally do not submit PUC filings to counsel for review.” Their
support for this claim is deposition testimony from one Claims
employee that it was his job to submit electronic safety incident
reports (ESIR) to PUC and he did not need approval from an
attorney. However, with regard to the Creek Fire, that employee
testified that he did consult with counsel before submitting an
ESIR.
“ ‘Substantial evidence is a deferential standard, but it is
not toothless.’ [Citation.] ‘ “ ‘We may not uphold a finding based
on [no evidence or] inherently improbable evidence . . . .’ ” ’
[Citation.]” (Lee v. Amazon.com, Inc. (2022) 76 Cal.App.5th 200,
222.) As no substantial evidence supported the court’s finding
that counsel did not deputize the claims department to assist in
investigating the cause of the Creek Fire to facilitate counsel’s
provision of legal advice to SCE, we reject the court’s finding that
there was no agency relationship for purposes of the work
product doctrine.
2. Dominant Purpose
The trial court also held the attorney work product doctrine
was inapplicable because the dominant purpose of SCE’s
investigation was to satisfy SCE’s obligation under Public
Utilities Code section 315 and PUC rule 17 to investigate the
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cause of the fire and report to PUC. The dominant purpose test
was developed in the context of the attorney-client privilege (see
Costco, supra, 47 Cal.4th at pp. 734-736), and our Supreme Court
has not weighed in on whether it applies to work product claims.
Fellow Courts of Appeal have done so, albeit generally without
discussion as to the sometimes differing issues at stake in the
work product context. (E.g., 2,022 Ranch v. Superior Court
(2003) 113 Cal.App.4th 1377, 1390-1395, 1401, disapproved on
another ground in Costco, supra, 47 Cal.4th at p. 739; Wellpoint
Health Networks, Inc. v. Superior Court (1997) 59 Cal.App.4th
110, 112; Aetna Casualty & Surety Co. v. Superior Court, supra,
153 Cal.App.3d at pp. 475-476; Watt Industries, Inc. v. Superior
Court (1981) 115 Cal.App.3d 802, 805.) Assuming without
deciding that the dominant purpose test applies to whether
something constitutes work product, the governing question is
what was the dominant purpose for counsel’s retention: legal
advice, or a non-legal reason? (Costco, supra, 47 Cal.4th at
pp. 735-736.)
The trial court found the dominant purpose of the
investigation was to ensure compliance with SCE’s legal
requirements as a highly-regulated entity. From that it reasoned
counsel were thus involved for a non-legal business purpose, a
conclusion that does not follow. Counsel’s involvement here to
ensure corporate compliance with legal reporting requirements
was a legal role, not a non-legal one, particularly in the face of
the uncontradicted evidence as to why counsel got involved with
the investigation. Indeed, PUC rule 17 expressly acknowledges
that a utility may consult with counsel in conducting the required
investigation, providing, “Nothing in this rule is intended to
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extend, waive, or limit any claim of attorney client privilege
and/or attorney work product privilege.” (PUC rule 17.)
The trial court’s approach suggests that when attorneys
advise on legal reporting obligations, they do so for a non-legal
business purpose. We disagree. California companies are faced
with myriad statutory and regulatory reporting and disclosure
obligations under both federal and state law. To comply with
those obligations and avoid unnecessary liability they often seek
advice from attorneys. That advice can include not only how and
what to report, but also whether one has a reporting or disclosure
obligation in the first place. Sound legal advice requires knowing
the applicable facts (good and bad) to determine whether one has
a reporting obligation, and, if so, how best to comply with it. A
company’s need to comply with a public reporting requirement
does not eviscerate work product protection; if it did, much of
what a lawyer does as part of advising organizational clients
would lose the work product protection to which it is entitled.
In this case, there is no evidence that SCE’s in-house
counsel was acting in a business, as opposed to legal, capacity.
SCE’s counsel Cardoza averred that the investigation facilitated
“the provision of legal advice” on five topics: “(1) potential legal
risks caused by the fire; (2) potential regulatory action related to
the fire; (3) potential legal strategies for mitigating risk;
(4) evaluations of potential company risk and monetary liability
in litigation or through regulatory action; and (5) consideration of
potential measures to be taken to minimize or avoid the risks of
future litigation or adverse regulatory action arising from similar
incidents.” All five categories are appropriate topics for legal
advice. Plaintiffs contend that three of these subjects (the
second, third and fifth) related to a “business purpose.” As
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explained above, SCE could properly seek legal advice in
connection with those subjects. Indeed, given the significant
potential legal exposure SCE faced from the Creek Fire in terms
of regulatory action, government claims, and civil litigation, one
would expect SCE to seek legal advice regarding its role (if any)
in causing the fire.
Although work product protection does not require the
anticipation of litigation (Aetna Casualty & Surety Co. v.
Superior Court, supra, 53 Cal.App.3d at pp. 478-479), we further
disagree with the trial court that the timing of the investigation
(before any litigation had been filed) created the inference that it
could not have been related to anticipated litigation. Given that
the Creek Fire occurred in the vicinity of SCE’s electrical
distribution lines, it was reasonable for SCE to believe that
litigation was likely. Indeed, SCE received evidence preservation
letters from plaintiffs’ counsel within a week of the fire.
Applying work product protection to investigations such as
the one at issue here advances an important policy behind the
doctrine, namely, to allow attorneys the freedom “to investigate
not only the favorable but the unfavorable aspects” of a client’s
situation, and in turn will promote more accurate and effective
investigations. (§ 2018.020, subd. (a).) As the court in In re
Kellogg Brown & Root, Inc. (D.C.Cir. 2014) 756 F.3d 754 noted,
businesses in “a significant swath of American industry” are now
“required by law to maintain compliance programs,” and, if
investigations conducted under such programs were subject to
disclosure in litigation, “businesses would be less likely to
disclose facts to their attorneys and to seek legal advice, which
would ‘limit the valuable efforts of corporate counsel to ensure
their client’s compliance with the law.’ ” (Id. at p. 759.)
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D. Plaintiffs Did Not Demonstrate Entitlement to
Production of SCE’s Qualified Attorney Work
Product
Having concluded the 108 documents are at least qualified
work product, we now turn to whether plaintiffs were
nevertheless entitled to their production. Qualified work product
is not subject to disclosure “unless the court determines that
denial of discovery will unfairly prejudice the party seeking
discovery in preparing that party’s claim or defense or will result
in an injustice.” (§ 2018.030, subd. (b).) “[A] showing that a
witness is no longer available or accessible, or some other
showing of unfair prejudice or injustice” is necessary to overcome
qualified work product protection. (Coito, supra, 54 Cal.4th at
p. 496.)
Here, the trial court accepted plaintiffs’ claims that SCE
delayed in notifying PUC that there were elevated amperage
readings on its Lopez Circuit on the day of the fire, and failed to
provide this data to CalFire, all of which led USFS to come to the
incorrect conclusion that LADWP transmission lines had caused
the fire. It found that the documents regarding “circuit
irregularities would no doubt give a clear picture as to the
causation of the Creek Fire, the scope of liability, and ultimately,
as the sequence of events suggest, that SCE made a deliberate
decision at various stages of its investigation to sidestep
unfavorable evidence and/or allow blame to be placed on the
LADWP.”
These findings are insufficient to justify disclosure of
qualified work product. Section 2018.030, subdivision (b)
requires a showing not just of relevance, but that plaintiffs would
be “unfairly prejudice[d] . . . in preparing” their case, or that
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nondisclosure would “result in an injustice.” The court made no
such finding, nor did plaintiffs establish they were unfairly
prejudiced or that “an injustice” would result if they were denied
access to SCE’s work product. Plaintiffs argue they “suffered
unfair prejudice in the form of their inability to fully rebut SCE’s
defense that LADWP was responsible for the Creek Fire.” This
contention fails because plaintiffs concede they have obtained the
information SCE allegedly withheld from CalFire and PUC,
namely, data regarding elevated amperages and alleged faults on
the Lopez Circuit,4 and have not demonstrated any inability to
take discovery of fact witnesses on which SCE bases its defense
to the subrogation claims.
We also note the April 18, 2022 master complaint, which
plaintiffs joined, alleges that SCE’s failure to disclose the
elevated amperages and faults on the Lopez Circuit “likely
resulted in fire investigators failing to search for, document,
secure, and/or otherwise preserve crucial physical evidence that
the Creek Fire was caused by SCE infrastructure.” Speculation
about why third parties did or did not take certain actions does
4 The April 18, 2022 master complaint, which plaintiffs
adopted, alleges “SCE failed to disclose [to public fire
investigators] the data showing that its infrastructure in the
vicinity of the origin of the Creek Fire suffered multiple elevated
amperage/fault events which caused operation of fuse(s),” and
that “[m]ore complete data was subsequently produced to
[s]ubrogation [p]laintiffs as part of this litigation . . . .” In
addition, plaintiffs asserted in their motion to compel that they
“forced SCE to produce the fault records that clearly demonstrate
SCE equipment started the Creek Fire.”
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not establish actual prejudice or unfairness compelling
production of SCE’s attorney work product.
Finally, plaintiffs argue that SCE’s withholding of the 108
documents has “adversely impacted [p]laintiffs’ discovery into
SCE’s failure to meet statutory requirements to timely and
accurately respond to official investigations of the origin and
cause of the Creek Fire.” By definition the non-production of
documents on work product grounds has some adverse impact on
discovery; after all, it means the documents are not discoverable.
(See Costco, supra, 47 Cal.4th at p. 732 [the exercise of privilege
“ ‘may occasionally result in the suppression of relevant
evidence’ ”].) Without more, such an adverse impact therefore
cannot suffice to show prejudice or unfairness, as it occurs
whenever privilege applies.
As we conclude the trial court abused its discretion in
failing to apply at least qualified work product protection to the
documents at issue and ordering the documents to be disclosed,
we do not address (and express no opinion on) whether the court
erred in finding the documents were not absolute work product.
In addition, as noted above, we do not express any opinion on
whether the court abused its discretion in finding the documents
were not protected by the attorney-client privilege.
DISPOSITION
The order to show cause is discharged, and the petition is
granted. Let a preemptory writ of mandate issue directing the
trial court to vacate the November 17, 2023 order directing SCE
to produce records in Los Angeles Superior Court case
No. 21STCV18308, entitled 21st Century Insurance Company et
al. v. Southern California Edison Company, and to issue a new
and different order denying the request to produce records on the
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grounds the records are protected attorney work product. SCE is
awarded its costs incurred in this writ proceeding.
CERTIFIED FOR PUBLICATION
WEINGART, J.
We concur:
CHANEY, J.
BENDIX, Acting P. J.
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