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Article: May 2017: Trial Practice Update

Business Litigation Reports

California Court Rules Communications with Public Relations Firm Not Privileged. In high-stakes litigation, the outcome of a case sometimes depends as much on what happens in the court of public opinion as in the courtroom. The right kind of media attention can increase settlement leverage, influence a court or arbitrator to view your client’s claims more favorably, or even stave off the filing of a complaint against your client in the first place. Clients in high-profile litigation thus routinely hire public relations firms and media consultants in addition to their retained counsel, to pursue their litigation goals.

There are potential dangers, however, in relying on non-attorneys for advice concerning litigation. With attorneys, clients can be assured that their communications will most likely be shielded by attorney-client privilege. But courts may not grant the same protection to a client’s discussions with a public relations consultant. Even worse, if such a consultant is privy to communications between client and attorney, some courts find that the otherwise reliable protection of attorney-client privilege may be waived by disclosure to the third-party consultant.

That was the conclusion reached by the Second District of the California Court of Appeal last month in Nicholas Behunin v. Superior Court, Case No. B272225, 2017 WL 977095 (Mar. 14, 2017). Nicholas Behunin brought a lawsuit against Charles Schwab and his son Michael Schwab over a real estate deal that went awry. The complaint alleged that the Schwabs were connected to the family of former Indonesia dictator Suharto, and that the Schwabs sought funding from the Suharto family for the real estate transaction. To put pressure on the Schwabs to settle the case, Behunin, through his attorneys, hired a media consulting firm, which created a website tying the Schwabs to corruption, human rights violations, and atrocities attributed to Suharto and his family.

The Schwabs struck back, filing a separate lawsuit against Behunin for libel, slander, and invasion of privacy based on the allegations on the website. Behunin sought to dismiss the complaint with an anti-SLAPP motion, but the Superior Court permitted the Schwabs to conduct limited discovery to oppose his motion. The Schwabs demanded to see communications among Behunin, his attorneys, and his public relations consultants. Over Behunin’s objection, the court ordered him to produce the documents, so he sought a writ of mandate from the Court of Appeal.

The Court of Appeal agreed with the Superior Court. As an initial matter, the Court of Appeal observed, there is no such thing in California as a “public relations privilege.” Communications between a client or his or her attorney and a public relations consultant are not protected from discovery, and the disclosure of otherwise privileged communications to a public relations consultant will result in a waiver of the privilege, unless the disclosure is “reasonably necessary to accomplish the purpose for which” the client needed to hire an attorney. For example, communications with a physician or other expert hired to help the attorney better advise the client on a case would not result in a waiver.

According to the court, the communications Behunin and his attorney had with the media consultant who created the website attacking the Schwabs did not satisfy this test. There was no evidence that Benhunin’s consultants helped his attorneys “in developing, discussing, or assisting in executing a legal strategy.” The evidence showed that his attorneys acted as little more than liaisons between Behunin and the consultants; the consultants did not assist Behunin’s attorneys in advising him or help to litigate the case.

Even as it ruled against Behunin, the Court of Appeal acknowledged that “[t]here may be situations in which an attorney’s use of a public relations consultant to develop a litigation strategy or a plan for maneuvering a lawsuit into an optimal position for settlement would make communications between the attorney, the client, and the consultant” privileged. Indeed, in its opinion, the Court of Appeal discussed and distinguished the facts of other cases—applying federal common law, not California law—where communications involving public relations consultants were found to be protected. The lesson to be learned from Behunin is not that media consultants should never be hired to advise on a case, but that they must be used to aid the attorney and his or her litigation strategy, not just the client’s interests in the litigation generally.