Confidential Info on Tobacco
LATHAM & WATKINS Barbara A. Caulfield (SBN 108999) Myra J. Pasek (SBN 151185) 505 Montgomery Street, Suite 1900 San Francisco, California 94111-2562 (415) 391-0600
Attorneys for Plaintiff SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO
BROWN & WILLIAMSON TOBACCO CORPORATION, a Delaware corporation, v. REGENTS OF THE UNIVERSITY OF CALIFORNIA, a public entity; and DOES 1 through 10, Defendants. Case No. 967298
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF APPLICATION
Date: February 17, 1995 TABLE OF CONTENTS I. INTRODUCTION.............................. 1
II. STATEMENT OF FACTS.......................... 2 IV. THE COURT SHOULD APPOINT A RECEIVER TO ENSURE THAT THE CONFIDENTIAL DOCUMENTS ARE PROTECTED...................... 11
V. DEFENDANT MUST PERMIT INSPECTION AND COPYING OF THE LIBRARY RECORDS........ A. The Public Records Act Permits B&W To Review And Copy The
Circulation Records.............................. 12 VI. B&W ALSO SEEKS TO BEGIN NOTICING DEPOSITIONS IMMEDIATELY.................. VII. CONCLUSION................................ 15 TABLE OF AUTHORITIES Cases Admiral Insurance Company v. United States District Court for the District of Arizona, 881 F.2d 1486 (9th Cir. 1988)........................10 American Civil Liberties Union Foundation v. Deukmejian, 32 Cal. 3d 440, 186 Cal. Rptr. 235, 242 (1982)............13 American Mutual Liability Ins. Co. v. Superior Court, 38 Cal. App. 3d 579, Cal. Rptr. 561 (1974)................7 Benge v. Superior Court, 131 Cal. App. 3d 336, 182 Cal. Rptr. 275 (1982)............6 Butt v. State of California, 4 Cal. 4th 668, 15 Cal. Rptr. 2d 480 (1992)...............5 California School Employee Association v. Sunnyvale Elementary, 36 Cal. App. 3d 46, 111 Cal. Rptr. 433 (1974)..............6 City of Los Angeles v. Superior Court, 85 Cal. App. 3d 143, 149 Cal. Rptr. 323 (1978).............8 Conn v. Superior Court, 196 Cal. App. 3d 774, 242 Cal. Rptr. 148 (1988)............8 Delaney v. Superior Court, 50 Cal. 3d 785, 268 Cal. Rptr. 753 (1990)................13 Great American Surplus Lines Ins. v. Ace Oil Co., 120 F.R.D. 533 (E.D. Cal. 1988).......................9 Henderson v. Security Nat. Bank, 72 Cal. App. 3d 764, 140 Cal. Rptr. 388 (1977).............8 KL Group v. Case, Kay & Lynch, 829 F.2d 909 (9th Cir. 1987).......................7, 9 Krusi v. Bear, Stearns & Co., 144 Cal. App. 3d 664, 192 Cal. Rptr. 793 (1983)............8 Maggiova v. Palo Alto Inn, Inc., 249 Cal. App. 2d 706, 57 Cal. Rptr. 787 (1967)............11 Mai Systems Corp. v. Peak Computers, Inc., 911 F.2d 511 (9th Cir. 1993).........................7 Masonite Corp. v. Superior Court, 25 Cal. App. 4th 1045, 31 Cal. Rptr. 2d 173 (1994)..........7 Matull & Associates v. Cloutier, 194 Cal. App. 3d 1049, 240 Cal. Rptr. 211 (1987)............6 Mavroudis v. Superior Court, 102 Cal. App. 3d 594, 162 Cal. Rptr. 724 (1980)............7 McGinty v. Superior Court, 26 Cal. App. 4th 204, 31 Cal. Rptr. 2d 292 (1994)...........9 Mitchell v. Superior Court, 37 Cal. 3d 591, 208 Cal. Rptr. 886 (1984)................6 Rittenhouse v. Superior Court, 235 Cal. App. 3d 1584, 1 Cal. Rptr. 2d 595 (1991)...........7 Ruckelshaus v. Monsanto, 463 U.S. 1315, 104 S. Ct. 3 (1983)....................10 Statutes California Code of Civil Procdure Section 2018(a).......6 California Code of Civil Procedure Section 511.090.......6 California Code of Civil Procedure Section 511.100..........12 California Code of Civil Procedure Section 512.060(a)(1).....5 California Code of Civil Procedure Section 564(b)(8).........11 California Code of Civil Procedure Section 2025(b)(2).....1, 14 California Code of Civil Procedure Sections 526(a)(1)-(4)....5 California Code of Evidence Section 912(a)..............7 California Code of Evidence Section 953...............7 California Code of Evidence Section 954...............7 California Constitution, Article IX, Section 9............12 California Government Code Section 6250 et seq...........1 California Government Code Section 6252(d).............12 California Government Code Section 6257.............1, 14 California Government Code Section 6267..............12 Other Authorities Law Review Commission Comment to California Evidence Code Section 1060............6 Legislative Committee Comment to Cal. Code Civ. Proc. Section 512.060.............6 I. INTRODUCTION Plaintiff Brown & Williamson Tobacco Corporation ("B&W") seeks to protect from disclosure documents currently in the possession of the Regents of the University of California (the "University"), that are being held in the library archives at the University of California at San Francisco. The documents (the "Confidential Documents") were improperly obtained from B&W and are entitled to the utmost protection because they contain attorney-client communications, attorney work product and sensitive trade secrets. Indeed, many of the Confidential Documents are already subject to a Kentucky court's order requiring that they be returned to B&W. Notwithstanding these facts, the University has allowed access to the Confidential Documents. At a minimum, therefore, the University must be enjoined from permitting anyone to have access to the Confidential Documents and required to secure the Confidential Documents. To ensure that B&W will not sustain any more damage than it already has, it also requests that the Court appoint a receiver over the Confidential Documents until the hearing on its Application for a Writ of Possession.[n.~1] In addition, under the California Public Records Act (Government Code Section 6250 et seq.), B&W must be afforded access to: (1) the records of how the University obtained the Confidential Documents (the "Source Records") and (2) the records of who has reviewed, copied or otherwise had access to the Confidential Documents (the "Circulation Records," and together with the Source Records, the "Library Records"). Cal. Gov. Code Section 6257. The Library Records are essential to B&W's ability to prevent further disclosure of the Confidential Documents. Finally, B&W seeks an order pursuant to Code of Civil Procedure Section 2025(b)(2) to commence noticing the depositions of the University and its employees immediately. That order is necessary for B&W to acquire further facts in preparation for a hearing on the order to show cause as well as to allow it to obtain the expeditious return of the Confidential Documents from others who may have, and may be disseminating, them. II. STATEMENT OF FACTS A. The Confidential Documents. The Confidential Documents consist of three boxes of documents held by the University at the Special Archives of the University of California at San Francisco, located at 530 Parnassus Avenue, San Francisco, California. Declaration of Mary L. Janky ("Janky Decl."); Declaration of Ernest J. Clements ("Clements Decl."), Paragraphs 7-10. B&W's review of them indicated that each of the boxes contains confidential communications, including documents protected by the attorney-client and/or work product privileges as well as documents containing confidential proprietary information. The Confidential Documents include copies of documents stolen and/or obtained without B&W's consent. See infra, Section II. B. The Confidential Documents also contain copies of documents produced by B&W to the Congressional Subcommittee on Health and the Environment pursuant to a confidentiality agreement. See infra, Section II. C. It is virtually impossible to ascribe an exact monetary value to these Confidential Documents. Declaration of Barbara A. Caulfield ("Caulfield Decl."), Paragraph 5. 1. The Confidential Documents Include Documents Stolen From B&W By A Paralegal. Merrill Williams worked as a paralegal for Wyatt, Tarrant & Combs ("Wyatt"), a Louisville law firm, from January, 1988 to approximately April 1, 1992. Clements Decl., Paragraph 3. Wyatt was involved in representing B&W, and Williams worked on a B&W litigation-based document collection and analysis project for Wyatt. Id. During his employment at Wyatt, Williams surreptitiously copied certain documents containing information protected by the attorney-client privilege and work product doctrine. Id., Paragraph 4. On or about September 29, 1993, Wyatt filed a complaint in the Jefferson Circuit Court, Kentucky, which B&W subsequently intervened in, seeking the return of the documents Williams stole as well as an order enjoining him from distributing or discussing them. Id., Paragraphs 5-6. On January 7, 1994, Judge Thomas B. Wine issued a temporary injunction prohibiting Williams, anyone working on his behalf, *and anyone informed of the injunction*, from disclosing, disseminating or using any of the material or information he took. Id. at Paragraph 6, Exhibit A thereto at pages 8-9. The injunction also required the turnover of the documents Williams took from B&W, *and any copies thereof*, to counsel for B&W. Id., Exhibit A thereto at page 9. 2. The Confidential Documents Also Include Documents Improperly Obtained From Congress. In June of 1994, the Congressional Committee on Energy and Commerce, Subcommittee on Health and the Environment, requested various documents from tobacco companies. Accordingly, B&W (and other tobacco companies) produced documents to the Subcommittee pursuant to the "Uniform Procedures for Tobacco Documents" agreement (the "Confidentiality Agreement"). Clements Decl., Paragraph 8, Exhibit D thereto. The Confidentiality Agreement stated that, The Subcommittee will use the following procedures in handling the documents produced to the Subcommittee by the tobacco companies. These unusual procedures are appropriate in this specific instance in light of the special and unique circumstances of the Subcommittee's tobacco investigation, *including the involvement of the tobacco companies in extensive product liability litigation*. Clements Decl., Exhibit D at page 1. Among other things, the Confidentiality Agreement limited the disclosure of the documents produced to those working on the Subcommittee's investigation, and contemplated that such persons were to be bound by it.[n.~2] Clements Decl., Paragraph 8, Exhibit D thereto at page 2 (Paragraph 4). In addition, the Confidentiality Agreement provided that "[n]o copies of the documents will be made except as needed for the Subcommittee's investigation." Clements Decl., Paragraph 8, Exhibit D thereto at page 2 (Paragraph 7). B. B&W's Attempts To Recover The Confidential Documents. B&W first determined that the University possessed certain documents belonging to it on or about February 1, 1995, when B&W completed an initial review of the documents in the archives at the UCSF library and determined that the documents were confidential, work product and/or privileged material. Janky Decl.; Caulfield Decl., Paragraph 2. On February 3, 1995, B&W, through their counsel Latham & Watkins, informed the University Librarian, Ms. Karen Butter, and University Legal Counsel, Ms. Shelly Drake, of the nature and character of the documents. Caulfield Decl., Paragraph 2, Exhibit A thereto. B&W requested the University's assistance in an investigation, and asked the University to return the documents. Id. The University has, without offering any justification, refused to return the Confidential Documents. Id., Paragraph 4. The University has also refused to specify from whom it obtained the Confidential Documents, or to identify who has had access to them.[n.~3] Id. C. Notice Of This Ex Parte Application. In response to the University's refusal to return the Confidential Documents to B&W, B&W advised it on Wednesday, February 15, 1995 at 1:00 p.m., that it intended to seek ex parte relief on February 17, 1995 at 3:30 p.m. in Department 8 of the San Francisco Superior Court. Caulfield Decl., Paragraph 6. III. DEFENDANT SHOULD BE RESTRAINED FROM ALLOWING ACCESS TO THE CONFIDENTIAL DOCUMENTS Under Code of Civil Procedure section 526(a)(1)-(4), the Court may issue an injunction in any of the following cases: (1) when the plaintiff is entitled to the relief demanded, and the demand includes restraining an act; (2) when the act complained of will produce great or irreparable injury; (3) when a party is about to violate the rights of another party; or (4) where pecuniary compensation would not afford adequate relief. Each of these is applicable in this case. "In deciding whether to issue a preliminary injunction, a court must weigh two 'interrelated' factors: (1) the likelihood that the moving party will ultimately prevail on the merits and (2) the relative interim harm to the parties from issuance or nonissuance of the injunction." Butt v. State of California, 4 Cal. 4th 668, 677, 15 Cal. Rptr. 2d 480 (1992). The balancing of the factors set forth in Butt weighs heavily in B&W's favor; therefore, a temporary restraining order and an order to show cause regarding a preliminary injunction should be issued pursuant to Code of Civil Procedure section 527, preventing the University from allowing anyone to review, copy or otherwise have access to the Confidential Documents. A. B&W Is Likely To Succeed On The Merits Because B&W Is Entitled To A Writ Of Possession For The Confidential Documents To obtain a writ of possession, B&W must show the "probable validity" of its claim to the Confidential Documents. See Code Civ. Proc. Section 512.060(a)(1) ("a writ of possession shall issue if... The plaintiff has established the probable validity of his claim to possession of the property.").[n.~4] "A claim has `probable validity' where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim." Cal. Code Civ. Proc. Section 511.090. The University's inability to show "that there is a reasonable probability that [it] can assert a successful defense to the action" dictates the issuance of the requested writ. See Legislative Committee Comment to Cal. Code Civ. Proc. Section 512.060 (brackets added). 1. The Confidential Documents Are B&W's Property. The Confidential Documents contain attorney-client privileged information, work product and confidential trade secret and proprietary information. B&W has a well-recognized, and entirely legitimate, interest in keeping this information confidential and outside the public domain. See Cal. Code Civ. Proc. Section 2018(a) ("it is the policy of this state to: (1) preserve 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; and (2) to prevent attorneys from taking undue advantage of their adversary's industry and efforts."); Mitchell v. Superior Court, 37 Cal. 3d 591, 599, 208 Cal. Rptr. 886 (1984) ("The attorney-client privilege has been a hallmark of Anglo-American jurisprudence for almost 400 years. The privilege authorizes a client to refuse to disclose, and to prevent others from disclosing confidential communications between attorney and client.") (Citations omitted); Law Review Commission Comment to Cal. Evid. Code Section 1060 ("The privilege is granted [to trade secrets] so that secret information essential to the continued operation of a business or industry may be afforded some measure of protection against unnecessary disclosure."). B&W owns not only the Documents, but the privileges that protect them. Matull & Associates v. Cloutier, 194 Cal. App. 3d 1049, 1056, 240 Cal. Rptr. 211, 215 (1987) ("[t]he law is clear that an attorney's work product belongs absolutely to the client"); Benge v. Superior Court, 131 Cal. App. 3d 336, 344, 182 Cal. Rptr. 275, 280 (1982) (same); California School Employee Association v. Sunnyvale Elementary, 36 Cal. App. 3d 46, 66, 111 Cal. Rptr. 433, 445 (1974) ("the owner of a trade secret is privileged to refuse to disclose and to prevent another from disclosing the secret"). Because the privileges are personal to the "holder," only the holder may waive the particular privilege in question. Rittenhouse v. Superior Court, 235 Cal. App. 3d 1584, 1588, 1 Cal. Rptr. 2d 595, 597 (1991); Mavroudis v. Superior Court, 102 Cal. App. 3d 594, 602, 162 Cal. Rptr. 724, 731 (1980); Cal. Evid. Code Sections 953, 954. California's Evidence Code thus provides that a privileged communication is waived only upon disclosure or consent to disclose a significant part of the communication "by the holder of the privilege, *without coercion*." Cal. Evid. Code Section 912(a) (West Supp. 1994) (emphasis added). Because the Documents were stolen and/or obtained without B&W's knowledge or consent, all disclosures of the Documents were coerced, and there has been no waiver of the attorney-client or any other applicable privileges. See, e.g., KL Group v. Case, Kay & Lynch, 829 F.2d 909, 919 (9th Cir. 1987) (inadvertent disclosure by attorney does not waive client's privilege) citing American Mutual Liability Ins. Co. v. Superior Court, 38 Cal. App. 3d 579, 113 Cal. Rptr. 561 (1974) (attorney-client privilege not waived by attorney's production in response to subpoena, because production not voluntary). The same line of reasoning applies to business secrets. Mai Systems Corp. v. Peak Computers, Inc., 911 F.2d 511, 520-23 (9th Cir. 1993) (applying California law; finding trade secret protected as long as owner takes reasonable steps to keep information secret); Masonite Corp. v. Superior Court, 25 Cal. App. 4th 1045, 1050-54, 31 Cal. Rptr. 2d 173, 177-79 (1994) (broadly construing statutory provisions regarding assertion of trade secret protection, finding no waiver); Cal. Civil Code Section 3426.1(d)(2) (holder must make efforts reasonable under the circumstances to maintain secrecy). B&W has never consented to the public disclosure or dissemination of the information contained in the Confidential Documents. Quite the contrary, B&W has acted diligently to protect this information from public disclosure and dissemination. That much is evidenced in its prosecution of the Kentucky suit against Merrill Williams as well as its providing of documents to Congress under the assurances of the Confidentiality Agreement. Consequently, those documents, and the information contained in them -- although in the posession of the University -- remain the property of B&W and continue to be protected by all applicable privileges. Furthermore, B&W, as owner of the documents and the privilege, is entitled to the return of Confidential Documents. 2. The University Is Wrongfully Retaining Possession Of B&W's Property. There also can be no dispute that the University is wrongfully in possession of the Confidential Documents. Because the University refuses to state from whom it received the Confidential Documents, it is impossible for B&W to determine the University's culpability, if any, in obtaining them.[n.~5] The University did not, however, receive the Confidential Documents from B&W, who is the only person authorized to disseminate them. But, even assuming the University was not initially at fault in receiving the documents, the University's refusal to return B&W's property to it constitutes an actionable interference with B&W's property rights. Krusi v. Bear, Stearns & Co., 144 Cal. App. 3d 664, 672; 192 Cal. Rptr. 793 (1983) ("action for conversion rests simply upon the interference with the plaintiff's dominion over his property [and] is a species of strict liability in which the defendant's good faith, due care, ignorance or mistake are irrelevant and may not be set up as a defense."); City of Los Angeles v. Superior Court, 85 Cal. App. 3d 143, 149-50, 149 Cal. Rptr. 323 (1978) (same); Henderson v. Security Nat. Bank, 72 Cal. App. 3d 764, 770-71, 140 Cal. Rptr. 388 (1977) ("plaintiff's right of redress [does not depend] on his showing, in any way, that the defendant did the act in question from wrongful motives, or generally speaking, even intentionally."). Furthermore, the University's copy of the Confidential Documents are the fruit of a wrongful taking or wrongful dissemination provided to the University in contravention of law and confidentiality agreements. See Conn v. Superior Court, 196 Cal. App. 3d 774, 785, 242 Cal. Rptr. 148 (1988) (upholding order commanding the return of misappropriated confidential documents as well as any fruits thereof, including attorney notes on or about the documents). Even in cases involving inadvertent or court-ordered disclosure of privileged documents (as opposed to misappropriation or theft), the owners of privileges consistently have obtained orders requiring that documents and their fruits be returned. See, e.g., Great American Surplus Lines Ins. v. Ace Oil Co., 120 F.R.D. 533, 539 (E.D. Cal. 1988) (applying California law; third party ordered to return privileged and work product documents disclosed to opposing party pursuant to subpoena, and ordered all to "refrain from making any reference to the documents or disclosing or summarizing in any manner any portion of the documents"); KL Group v. Case, Kay & Lynch, 829 F.2d 909, 917-919 (9th Cir. 1987) (applying California law; upholding order requiring return of all copies and written summaries of privileged letter inadvertently produced in discovery); McGinty v. Superior Court , 26 Cal. App. 4th 204, 212, 31 Cal. Rptr. 2d 292, 293 (1994) (third party required to return copies of documents containing trade secrets originally disclosed pursuant to protective order.) The University cannot provide any reasonable justification for its failure to return the documents to B&W. B&W is the only person authorized to provide such confidential documents to the University or any one else. The Confidential Documents can only be the fruit of a wrongful taking of the documents and must, pursuant to numerous California authorities, be returned to B&W, their rightful owner. Accordingly, there is more than a "reasonable probability" that B&W has a claim to possession of the Confidential Documents. In fact, B&W has the only claim to possession of those documents, and it is highly likely to prevail on the merits of its application for a writ of possession. B. B&W Will Suffer Irreparable Harm If The Requested Relief Is Not Granted. As explained above, some of the Confidential Documents were stolen from B&W and others appear to have been misappropriated somehow after they were released to a Congressional subcommittee under the strict Confidentiality Agreement, which limited their disclosure to certain members of Congress and other government employees solely for the purpose of the Congressional committee's investigation. The Confidential Documents contain attorney-client communications, attorney work product and closely-held trade secrets. It is hard to imagine a group of documents that is entitled to greater protection. The disclosure of attorney-client privileged information is recognized to cause irreparable harm. See, e.g., Admiral Insurance Company v. United States District Court for the District of Arizona, 881 F.2d 1486, 1490 (9th Cir. 1988) (order requiring disclosure of attorney-client information was ripe for review because the disclosure would result in "immediate, irreparable harm."). Similarly, the disclosure of trade secrets is recognized to cause irreparable harm. See, e.g., Ruckelshaus v. Monsanto, 463 U.S. 1315, 1317, 104 S. Ct. 3, 5 (1983) (injunction protecting trade secrets to remain in effect pending appeal to avoid irreparable harm). Every release of the Confidential Documents or the information contained in them seriously impinges on B&W's private communications with its attorneys and the confidential thought processes of the attorneys and threatens B&W's protected trade secrets. No monetary award could compensate B&W for such harm. Absent returning the Confidential Documents to B&W, the only way to protect B&W from ongoing harm is to prevent the University from permitting any further access to the Confidential Documents and to require that the Confidential Documents be maintained in a secure location. C. The Balance Of The Hardships Weighs In B&W's Favor. In contrast to the irreparable harm to B&W, there will be no harm to the University from issuance of a TRO. There will be no monetary cost to the University to comply with the requested TRO; the University simply needs to segregate and take reasonable security measures to ensure that no one has access to the Confidential Documents.[n.~6] Nor does the University obtain any monetary benefit from allowing access to the Confidential Documents so there will be no loss from securing the Confidential Documents. In addition, there will be no intangible harm to the University or its library patrons from being denied access to the Confidential Documents while the issues in this litigation are resolved. If B&W ultimately prevails, then the University and its patrons were not entitled to access to the Confidential Documents anyway. If B&W ultimately does not prevail, then the University and its patrons may have access to the Confidential Documents at that time, and there is no reason to believe that a brief delay in access to the Confidential Documents will result in any harm. IV. THE COURT SHOULD APPOINT A RECEIVER TO ENSURE THAT THE CONFIDENTIAL DOCUMENTS ARE PROTECTED Code of Civil Procedure Section 564(b)(8) provides that, [i]n superior court a receiver may be appointed by the court in which an action or proceeding is pending, or by a judge thereof, in the following cases: ... (8) In all other cases where receivers have heretofore been appointed by the usages of equity. "The appointment of a receiver rests largely in the discretion of the trial court." Maggiova v. Palo Alto Inn, Inc., 249 Cal. App. 2d 706, 710, 57 Cal. Rptr. 787 (1967). The appointment of a receiver is proper where "it appears that the party seeking the appointment has at least a probable right or interest in the property sought to be placed in receivership and that the property is in danger of destruction, removal or misappropriation...." Id. B&W does not believe that a TRO will, by itself, provide sufficient protection to the integrity of the Confidential Documents. While B&W has no doubt that the University will attempt to fully comply with the terms of the TRO, the fact remains that because of the number of persons having access to the University's libraries, as well as the apparent interest in the Confidential Documents, security may be breached. Given that the costs of such a breach will be great to B&W, while the appointment of a receiver is of minimal consequence to the University, the appointment of a receiver is merited. Accordingly, B&W requests that the Court appoint a receiver to take and maintain possession of the documents until either the Court grants B&W's requested writ of possession or until the conclusion of this action. V. DEFENDANT MUST PERMIT INSPECTION AND COPYING OF THE LIBRARY RECORDS A. The Public Records Act Permits B&W To Review And Copy The Circulation Records. Under the Public Records Act (the "Act"), B&W should be permitted to inspect and copy the Circulation Records. Government Code section 6267 provides, in pertinent part, that: All registration and circulation records of any library... supported by public funds shall remain confidential and shall not be disclosed to any person... except as follows: (a) By a person acting within the scope of his or her duties within the administration of the library. * * * (c) By order of the appropriate superior court. "Registration records" include any information which a library requires a patron to provide in order to become eligible to borrow books and other materials, and "circulation records" include "any information which identifies the patrons borrowing particular books and other material." Id.[n.~7] B&W is not aware of any case law interpreting section 6267, and the statute does not set forth the standard for issuance of an order. However, in analogous situations, courts balance the interests of the parties to determine the propriety of ordering the release of documents. See American Civil Liberties Union Foundation v. Deukmejian, 32 Cal. 3d 440, 452, 186 Cal. Rptr. 235, 242 (1982) (applying balancing test under section 6255 of the Act to determine whether records are exempt from disclosure); Delaney v. Superior Court, 50 Cal. 3d 785, 809, 268 Cal. Rptr. 753, 768 (1990) (applying balancing test to determine whether reporter must disclose confidential information). The balance weighs heavily in favor of granting relief under 6267(c), to permit B&W access to the Circulation Records.[n.~8] As explained above, B&W will suffer irreparable harm from any further release of information from the Confidential Documents. Therefore, it is necessary for B&W to learn who has reviewed and/or copied the Confidential Documents so that appropriate measures can be taken to prevent disclosure of confidential information through persons who have had access to the Confidential Documents. On the other hand, release of the Circulation Records will not unduly impinge any privacy rights of the persons that have had access to the Confidential Documents. That a person has reviewed the documents does not reveal embarrassing or personal information about that person. Revealing their names to B&W would not be intrusive but it would give B&W an opportunity to stop the disclosure of documents that should never have been disclosed to anyone. B. The Source Records Are Not Confidential or Exempt And Should Be Available To B&W To Inspect And Copy. Under the Act, the University must release the Source Records showing how it obtained the Confidential Documents. As explained above, the University's records are subject to the Act. See footnote 7. All public records, requested with reasonable particularity, must be made available, unless exempted by the Act from disclosure. Cal. Gov. Code Section 6257. Nowhere in the language of section 6267 (which only limits disclosure of circulation and registration records) or, to B&W's knowledge, in any provision of the Act, is information regarding the source of a library's materials deemed exempt from disclosure. Even if B&W was compelled to show a need for the information (which is not required under the Act),[n.~9] the arguments that support the release of the Source Records are compelling. Such records will likely help B&W discover who wrongfully misappropriated the Confidential Documents. B&W needs to find out how Confidential Documents reached the University so that B&W can prevent further releases and take appropriate action against the responsible persons. In comparison, those who improperly obtained the documents have no legitimate claim of harm from having their identities revealed. VI. B&W ALSO SEEKS TO BEGIN NOTICING DEPOSITIONS IMMEDIATELY Pursuant to Code of Civil Procedure Section 2025(b)(2), plaintiff may serve a deposition notice without leave of court on any date that is 20 days after the service of the summons or, on appearance by, any defendant. *However, on motion with or without notice, the court, for good cause shown, may grant to a plaintiff leave to serve a deposition notice on an earlier date.* (Emphasis added). "Good cause" exists for allowing B&W to commence discovery against the University immediately. While the University will not divulge all their identities, it does not deny that others have had access to and have reviewed the Confidential Documents. Every day that goes by increases the likelihood that those who may have obtained copies of the Confidential Documents from the University will themselves make copies, further frustrating B&W's attempt to protect its legitimate interest in preserving the confidentially of its documents. Consequently, it is essential that B&W be allowed to begin noticing the depositions of University personnel immediately, not only to obtain evidence for the hearing on the order to show cause, but also so that it may prevent the unauthorized dissemination of its property. VII. CONCLUSION For all of the foregoing reasons, B&W respectfully requests that the University be restrained from allowing any person or entity access to the Confidential Documents, and that the Court appoint a receiver to take possession of those documents. B&W further respectfully requests that it be permitted to inspect and copy the Library Records and immediately begin noticing the depositions of University personnel to prevent the further wrongful dissemination of its protected property.
DATED: February 16, 1995
Barbara A. Caulfield
By /s/ Barbara A. Caulfield ==========FOOTNOTES=========== 1. On this date, B&W has also filed an Application for a Writ of Possession to recover its Confidential Documents. That Application will be heard on March 3, 1995. 2. Members or staff of Congress did not have to give their express agreement to be bound by the Confidentiality Agreement, and were instead bound by their ethical obligations. Id. The Confidentiality Agreement contemplated the broader dissemination of the documents only upon the occurrence of certain events, which never occurred. Clements Decl. Paragraph 8, Exhibit D thereto at page 3 (Paragraph 8). 3. In this action, B&W also seeks declaratory relief to obtain this information. See Second Cause of Action in Complaint for Specific Recovery of Personal Property and Declaratory Relief, attached hereto as Exhibit A. 4. Section 512.060(a) also requires that the plaintiff file "an undertaking as required by Section 515.010." B&W will file an undertaking in the amount of at least $1,000.00 in connection with this Application, which undertaking will apply to the writ of possession in the event that it is granted. 5. Interestingly, personnel at UCSF apparently refer to the Confidential Documents as "the Brown & Williamson Documents." See Complaint, Paragraph 7. Yet, despite the unusual circumstances under which they received the Confidential Documents, and the confidentiality of those documents, no one at the University contacted B&W to inquire as to whether those documents should be disseminated. 6. B&W is willing to bear any reasonable cost of properly securing the Confidential Documents. Caulfield Decl., Paragraph 3. 7. The University library, as part of a public university, is supported by public funds and, therefore, is covered by section 6267. More generally, the Regents of the University of California and information held by the University are covered by the Act. The Act is applicable to records of state agencies. Cal. Gov. Code Section 6252(d). State agencies include "every state office, officer, department, division, bureau, board and commission or other state body..." Id. Section 6252(a) (emphasis added). The University of California was established as a "public trust." Cal. Const. Art. IX, Section 9. Furthermore, "public entity" is expressly defined to include the Regents of the University of California. Cal. Code Civ. Proc. Section 511.100. Therefore, defendant is a state body subject to the Act. 8. Release of the Library Records under section 6267(a) would also be appropriate. Recognizing the right that B&W has to obtain and protect the Confidential Documents, the administrator of the library could release the Library Records voluntarily. Furthermore, any Library Records associated with the Confidential Documents are fruits of the wrongful taking and dissemination of those documents. See Conn, 196 Cal. App. 3d at 785. 9. The balancing of interests described below is only relevant if the University seeks to exempt the Library Records from disclosure under Government Code section 6255, which permits a public entity to withhold public records only if it can show that "the public interest served by not making the record public clearly outweighs the pubic interest served by disclosure of the record." For the reasons set forth herein, the University cannot make the requisite showing.
LATHAM & WATKINS
Attorneys for Plaintiff SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO
BROWN & WILLIAMSON TOBACCO CORPORATION, a Delaware corporation, v. REGENTS OF THE UNIVERSITY OF CALIFORNIA, a public entity; and DOES 1 through 10, Defendants.
Case No. 967298 Plaintiff, Brown & Williamson Tobacco Corporation, a Delaware corporation ("B&W"), for causes of action for specific recovery of personal property and declaratory relief against defendants the Regents of the University of California, a public entity (the "University"), and Does 1 through 10, alleges as follows: PARTIES AND VENUE 1. B&W is a Delaware corporation with its principal place of business in Louisville, Kentucky. 2. B&W is informed and believes, and thereon alleges, that the University is a public entity as defined by California Code of Civil Procedure section 511.100. 3. The true names or capacities, whether individual, corporate, associate, or otherwise, of defendants named herein as Does 1 through 10, inclusive, are unknown to B&W. B&W sues such defendants by such fictitious names pursuant to section 474 of the California Code of Civil Procedure. B&W is informed and believes and thereon alleges that each of said defendants is responsible in some manner for the events, transactions, or arrangements described herein. B&W will amend or supplement this complaint to show their true names and capacities when they have been ascertained. I. FIRST CAUSE OF ACTION SPECIFIC RECOVERY OF PERSONAL PROPERTY/CONVERSION (AGAINST THE UNIVERSITY AND DOES 1 THROUGH 10) 4. B&W refers to and incorporates herein by reference, each and every allegation contained in paragraphs 1 through 3, inclusive, above. 5. At all times mentioned herein, B&W was, and still is, the owner of the following described personal property: a set of confidential documents which collectively are subject to the attorney-client privilege, which constitute privileged attorney work product, and/or which contain confidential and highly valuable trade secrets (the "Confidential Documents"). See Declaration of Ernest J. Clements, attached hereto as Exhibit A. B&W, as owner of the Confidential Documents, is entitled to immediate and exclusive possession of them. B&W has never authorized the release of these confidential documents. 6. B&W states that the Confidential Documents were stolen and/or obtained without B&W's knowledge or consent. The Confidential Documents are, therefore, covered by contractual, legal and ethical duties to uphold and preserve the attorney-client and other confidential privileges and agreements attaching to the Confidential Documents. The Confidential Documents also are the subject of an injunction and restraining order issued by the Honorable Thomas B. Wine, Judge of the Jefferson Circuit Court, State of Kentucky, prohibiting anyone who is informed of his Restraining Order from releasing the Confidential Documents in any way. A true and correct copy of Judge Wine's Restraining Order is dattached hereto as Exhibit B, which was presented to the Regents on February 3, 1995. 7. On or about February 1, 1995, B&W first confirmed by examination of the documents that the University wrongfully and without B&W's consent obtained possession of the Confidential Documents. B&W is informed and believes, and thereon alleges, that the Confidential Documents are still wrongfully retained and kept at the University in its archive library located at 530 Parnassus Avenue in San Francisco, California, 94117. See Declaration of Ernest J. Clements, attached hereto as Exhibit A. B&W is informed and believes, and thereon alleges, that the University's archive library staff refers to the Confidential Documents as "the Brown & Williamson Documents," and keeps them in three boxes so labelled in the library's archives. 8. While the University was in the wrongful possession of the Confidential Documents, B&W repeatedly demanded the immediate return of the Confidential Documents. Despite these demands, the University refused to deliver the Confidential Documents to B&W, and continues to possess wrongfully the Confidential Documents. 9. The University's possession of the Confidential Documents constitutes conversion, entitling B&W to specific recovery of the property. The exact property converted is identified with specificity in paragraphs 5 through 7, above. By this action, B&W seeks to recover this specific personal property. II. SECOND CAUSE OF ACTION DECLARATORY RELIEF (AGAINST THE UNIVERSITY AND DOES 1 THROUGH 10) 10. B&W refers to and incorporates herein by reference, each and every allegation contained in paragraphs 1 through 9, inclusive, above. 11. B&W is informed and believes, and thereon alleges, that the University has maintained and continues to maintain, as part of its routine business practices, various records (the "Library Records") relating to the Confidential Documents which contain, among other things, information identifying individuals who have inspected, reviewed, copied or otherwise had access to the Confidential Documents, and records of how the University obtained the Confidential Documents. 12. B&W has requested that the University allow B&W to inspect and copy the Library Records so that, among other things, B&W may take appropriate measures to prevent further disclosure of the Documents. Contrary to the provisions of the California Public Records Act, Government Code section 6250, et seq ., the University has refused this request, prohibiting B&W from accessing Library Records in any manner. 13. An actual controversy has arisen and now exists between B&W and the University concerning their respective rights and duties in that B&W contends that it may inspect and copy the Library Records, whereas the University disputes this contention and contends that B&W may not inspect and copy the Library Records. PRAYER FOR RELIEF WHEREFORE, B&W prays for judgment against the University and Does 1 through 10 as follows: 1. For the immediate recovery of the possession of the Confidential Records; 2. For a temporary restraining order and preliminary injunction preventing access to the Confidential Documents except by B&W or their counsel, and other appropriate equitable relief, pursuant to California Code of Civil Procedure sections 526 and 527 and other applicable law. 3. For a declaration pursuant to California Code of Civil Procedure section 1060, California Government Code section 6258 and other applicable law, that B&W may inspect on an expedited basis and copy the Library Records; 4. For costs of suit incurred herein, including attorneys' fees; and 5. For such other and further relief as the Court may deem just and proper. Dated: February 14, 1995
LATHAM & WATKINS
By /s/ Barbara A. Caulfield
LATHAM & WATKINS
Attorneys for Plaintiff SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO
BROWN & WILLIAMSON TOBACCO CORPORATION, a Delaware corporation, v. REGENTS OF THE UNIVERSITY OF CALIFORNIA, a public entity; and DOES 1 through 10, Defendants. Case No. 967298 MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF APPLICATION FOR A WRIT OF POSSESSION AND A TURNOVER ORDER TO AID IN THE ENFORCEMENT THEREOF
Date: March 3, 1995 TABLE OF CONTENTS I. INTRODUCTION.................... 1 II. FACTS......................... 2
A. The Confidential Documents (Sections 512.010(b)(3) & (4)).................. 2. The Confidential Documents Also Include Documents Improperly Obtained From Congress........... 4 C. B&W's Attempts To Recover The Confidential Documents (Section 512.020(b)(2))............... 5 III. THE ISSUANCE OF A WRIT OF POSSESSION IS NOT ONLY AUTHORIZED, BUT IMPERATIVE................. 5
A. B&W Has A Valid Claim To Possession Of The Confidential Documents..........
2. The University Is Wrongfully Retaining Possession Of B&W's Property........ C. The Court Should Grant A Turnover Order To Aid In The Enforcement Of The Writ................... 12 IV. CONCLUSION...................... 12 TABLE OF AUTHORITIES Cases Admiral Ins. Co. v. United States District Court, District of Arizona, 881 F.2d 1486 (9th Cir. 1988)...............11 American Mutual Liability Ins. Co. V. Superior Court, 38 Cal. App. 3d 579, 113 Cal. Rptr. 561 (1974).......7 Benge v. Superior Court, 131 Cal. App. 3d 336, 182 Cal. Rptr. 275 (1982)......6 California School Employee Association v. Sunnyvale Elementary, 36 Cal. App. 3d 46, 111 Cal. Rptr. 433 (1974)........6 City of Los Angeles v. Superior Court, 85 Cal. App. 3d 143, 149 Cal. Rptr. 323 (1978).......9 Coalition Against Police Abuse v. Superior Court, 170 Cal. App. 3d 888, 216 Cal. Rptr. 614 (1985).......10 Conn v. Superior Court, 196 Cal. App. 3d 774, 242 Cal. Rptr. 148 (1988)................9, 10 Ecolab, Inc. v. Paolo, 753 F. Supp. 1100 (E.D.N.Y. 1991).............11 Falstaff Brewing Corp. v. Philip Morris, Inc., 89 F.R.D. 133 (N.D. Cal. 1981)..............10 Great American Surplus Lines Ins. v. Ace Oil Co., 120 F.R.D. 533 (E.D. Cal. 1988)...............10 Henderson v. Security Nat. Bank, 72 Cal. App. 3d 764, 140 Cal. Rptr. 388 (1977).......9 In re IBP Confidential Business Documents Litigation, 754 F.2d 787 (8th Cir. 1985)................11 KL Group v. Case, Kay & Lynch, 829 F.2d 909 (9th Cir. 1987)...............7, 10 Krusi v. Bear, Stearns & Co., 144 Cal. App. 3d 664, 192 Cal. Rptr. 793 (1983)......8 Mai Systems Corp. v. Peak Computers, Inc., 911 F.2d 511 (9th Cir. 1993).................7 Masonite Corp. v. Superior Court, 25 Cal. App. 4th 1045, 31 Cal. Rptr. 2d 173 (1994).....7 Matull & Associates v. Cloutier, 194 Cal. App. 3d 1049, 240 Cal. Rptr. 211 (1987).......6 Mavroudis v. Superior Court, 102 Cal. App. 3d 594, 162 Cal. Rptr. 724 (1980)......7 McGinty v. Superior Court, 26 Cal. App. 4th 204, 31 Cal. Rptr. 2d 292 (1994)...10, 11 Mitchell v. Superior Court, 37 Cal. 3d 591, 208 Cal. Rptr. 886 (1984)..........6 Remington Rand v. Business Systems, Inc., 830 F.2d 1260 (3d Cir. 1987)................11 Rittenhouse v. Superior Court, 235 Cal. App. 3d 1584, 1 Cal. Rptr. 2d 595 (1991)......7 Ruckelshaus v. Monsanto, 463 U.S. 1315, 104 S. Ct. 3 (1983)............11 United States v. Derr, 1993 U.S. Dist. LEXIS 11411, *5 (N.D. Cal. 1993)......10 Vacco Industries, Inc. v. Van Den Berg, 5 Cal. App. 4th 34, 6 Cal. Rptr. 2d 602 (1992).......7 Statutes California Code of Civil Procedure Section 511.090..........6 California Code of Civil Procedure Section 512.010(b)(5)......2 California Code of Civil Procedure Section 512.060(a).........5 California Code of Civil Procedure Section 512.070...........12 California Code of Civil Procedure Section 2018(a)..........6 California Code of Civil Procedure Section 3426.1(d)(2).......7 California Code of Evidence Section 912(a)..............7 California Code of Evidence Section 953.................7 California Code of Evidence Section 954.................7 Other Authorities Law Review Commission Comment to Cal. Evid. Code Section 1060..................6 Law Revision Commission Comment, 1973 Addition, to Cal. Code Civ. Proc. Section 512.070.............12 Legislative Committee Comment to Cal. Code Civ. Proc. Section 512.060..............* I. INTRODUCTION B&W is applying for **a writ of possession and a turnover order in aid of the enforcement thereof to recover three boxes of documents (the "Confidential Documents") currently held by the University at the Special Archives of the library at the University of California at San Francisco ("UCSF"). The Confidential Documents contain attorney-client privileged communications, attorney work product, and sensitive trade secret and proprietary information. B&W has never consented to the public disclosure of the Confidential Documents, and neither provided, nor authorized the providing of those documents to University. To the contrary, B&W has vigorously sought to prevent the disclosure and dissemination of the Confidential Documents. Even a cursory review of the Confidential Documents, which UCSF's staff refers to as the "Brown & Williamson Documents," reveals that they contain confidential communications accorded weighty protections under California law. The University did not receive the Confidential Documents from B&W and has refused to disclose from whom it did obtain them. That refusal, in and of itself, completely undermines any argument the University might make that its possession of those documents is proper. The University is aware of the fact that the Confidential Documents were stolen and/or obtained without B&W's knowledge or consent. Roughly two thirds of the Confidential Documents are already subject to a Kentucky court's order which prevents their use and dissemination. See Declaration of Ernest Clements ("Clements Decl.") at Paragraphs 2-8. Most of the remaining documents consist of materials given to Congress pursuant to a confidentiality agreement. Id. at Paragraph 8. B&W has fully apprised the University of these facts, and demanded the return of its documents. The University, without offering any reasonable justification, has refused to do so. See Declaration of Barbara A. Caulfield ("Caulfield Decl.") at Paragraphs 2-4 Accordingly, the granting of this writ of possession is not only merited, but imperative. The University is impermissibly interfering with B&W's right to exclusive possession of its property. No form of injunction can provide B&W with the same assurances against the dissemination of its confidential documents as the possession of them. Moreover, the University will incur no prejudice if this writ is granted. Accordingly, for the reasons stated herein, B&W respectfully requests that the Court grant the requested writ of possession and turnover order in aid of the enforcement thereof. II. FACTS [n.~1] A. The Confidential Documents (Sections 512.010(b)(3) & (4)). The Confidential Documents consist of three boxes of documents held by the University at the Special Archives of the University of California at San Francisco, located at 530 Parnassus Avenue, San Francisco, California. Declaration of Mary L. Janky ("Janky Decl."); Clements Decl. Paragraph 7. UCSF's archive library staff refers to the Confidential Documents as "the Brown & Williamson Documents," and maintains them in three boxes in the library's archives. Janky Decl.; Clements Decl. Paragraph 7. After reviewing the documents, B&W concluded that the boxes held by the University contain confidential communications, including documents protected by the attorney-client and/or work product privileges as well as documents containing confidential proprietary information. The Confidential Documents include copies of documents stolen from B&W by a paralegal. See infra, Section II. B. 1. The Confidential Documents also contain copies of documents produced by B&W to the Congressional Subcommittee on Health and the Environment pursuant to a confidentiality agreement. See infra, Section II. B. 2.[n.~2] It is virtually impossible to ascribe an exact monetary value to the Confidential Documents. Caulfield Decl., Paragraph 5. B. The Confidential Documents Were Stolen From B&W And/Or Obtained Without B&W's Knowledge Or Consent (Section 512.010(b)(2)). 1. The Confidential Documents Include Documents Stolen From B&W By A Paralegal. Merrill Williams worked as a paralegal for Wyatt, Tarrant & Combs ("Wyatt"), a Louisville law firm, from January, 1988 to approximately April 1, 1992. Clements Decl., Paragraph 3. Wyatt was involved in representing B&W, and Williams worked on a B&W litigation-based document collection and analysis project for Wyatt. Id.,Paragraph 2-3. During his employment at Wyatt, Williams surreptitiously copied certain documents containing information protected by the attorney-client privilege and work product doctrine. Id., Paragraph 4. On or about September 29, 1993, Wyatt filed a complaint in the Jefferson Circuit Court of Kentucky, which B&W subsequently intervened in, seeking the return of the documents Williams stole as well as an order enjoining him from distributing or discussing them. Id., Paragraph 5. On January 7, 1994, Judge Thomas B. Wine issued a temporary injunction prohibiting Williams, anyone working on his behalf, *and anyone informed of the injunction*, from disclosing, disseminating or using any of the material or information he took. Clements Decl. Paragraph 6, Exhibit A thereto at pages 8-9. The injunction also required the of all documents Williams took from B&W, *and any copies thereof*, to counsel for B&W. Id. at page 9. 2. The Confidential Documents Also Include Documents Improperly Obtained From Congress. In June of 1994, the Congressional Committee on Energy and Commerce, Subcommittee on Health and the Environment, requested various documents from tobacco companies in connection with an investigation. While B&W wished to assist the Subcommittee in its investigation, it also was concerned about disclosing its confidential information. Accordingly, B&W (and other tobacco companies) agreed to produce documents to the Subcommittee pursuant to the "Uniform Procedures for Tobacco Documents" agreement (the "Confidentiality Agreement"). Clements Decl. Paragraph 8, and Exhibit D thereto. The Confidentiality Agreement stated that, The Subcommittee will use the following procedures in handling the documents produced to the Subcommittee by the tobacco companies. These unusual procedures are appropriate in this specific instance in light of the special and unique circumstances of the Subcommittee's tobacco investigation, *including the involvement of the tobacco companies in extensive product liability litigation*. Clements Decl., Exhibit D thereto, at page 1. Among other things, the Confidentiality Agreement limited the disclosure of the documents produced to those involved in the Subcommittee's investigation, and contemplated that such persons were to be bound by it.[n.~3] Id. at page 2 (Paragraph 4). In addition, the Confidentiality Agreement provided that "[n]o copies of the documents will be made except as needed for the Subcommittee's investigation." Id. at page 2 (Paragraph 7). C. B&W's Attempts To Recover The Confidential Documents (Section 512.020(b)(2)). B&W first determined that the University possessed certain documents belonging to it on or about February 1, 1995, when B&W completed an initial firsthand review of the documents in the archives at the UCSF library and determined that the documents were confidential, work product and/or privileged material. Caulfield Decl., Paragraph 2. On February 3, 1995 B&W, through their counsel Latham & Watkins, informed the University Librarian, Ms. Karen Butter, and University Legal Counsel, Ms. Shelly Drake, of the nature and character of the documents. Id University's assistance in an investigation, and asked the University to return the documents. Id. The University has, without offering any justification, refused to return the Confidential Documents. Id., Paragraph 3. The University also has refused to specify from whom it obtained the Confidential Documents, or to identify who has had access to them.[n.~4] Id. III. THE ISSUANCE OF A WRIT OF POSSESSION IS NOT ONLY AUTHORIZED, BUT IMPERATIVE [A] writ of possession shall issue if both of the following are found; (1) The plaintiff has established the probable validity of his claim to possession of the property. (2) The plaintiff has provided an undertaking as required by Section 515.010. Code of Civil Procedure Section 512.060(a). Both requirements are met here. A. B&W Has A Valid Claim To Possession Of The Confidential Documents. To obtain a writ of possession, B&W must show the probable validity of its claim to the Confidential Documents. "A claim has `probable validity' where it is more likely than not that the plaintiff will obtain a judgment against the defendant on that claim." Cal. Code Civ. Proc. Section 511.090. The University's inability to show "that there is a reasonable probability that [it] can assert a successful defense to the action" dictates the issuance of the requested writ. See Legislative Committee Comment to Cal. Code Civ. Proc. Section 512.060 (brackets added). 1. The Confidential Documents Are B&W's Property. The Confidential Documents contain attorney-client privileged information, work product and confidential trade secret and proprietary information. B&W has a well-recognized, and entirely legitimate, interest in keeping this information confidential and outside the public domain. See Cal. Code Civ. Proc. Section 2018(a) ("it is the policy of this state to: (1) preserve 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; and (2) to prevent attorneys from taking undue advantage of their adversary's industry and efforts."); Mitchell v. Superior Court, 37 Cal. 3d 591, 599, 208 Cal. Rptr. 886 (1984) ("The attorney-client privilege has been a hallmark of Anglo-American jurisprudence for almost 400 years. The privilege authorizes a client to refuse to disclose, and to prevent others from disclosing confidential communications between attorney and client. Clearly, the fundamental purpose behind the privilege is to safeguard the confidential relationship between clients and their attorneys so as to promote full and open discussion of the facts and tactics surrounding individual legal matters") (Citations omitted); Law Review Commission Comment to Cal. Evid. Code Section 1060 ("The privilege is granted [to trade secrets] so that secret information essential to the continued operation of a business or industry may be afforded some measure of protection against unnecessary disclosure.") (brackets added). B&W owns not only the Documents, but the privileges that protect them. Matull & Associates v. Cloutier, 194 Cal. App. 3d 1049, 1056, 240 Cal. Rptr. 211, 215 (1987) ("[t]he law is clear that an attorney's work product belongs absolutely to the client"); Benge v. Superior Court, 131 Cal. App. 3d 336, 344, 182 Cal. Rptr. 275, 280 (1982) ("the [attorney-client] privilege belongs to the client and not the attorney"); California School Employee Association v. Sunnyvale Elementary, 36 Cal. App. 3d 46, 66, 111 Cal. Rptr. 433, 445 (1974) ("the owner of a trade secret is privileged to refuse to disclose and to prevent another from disclosing the secret"). Because the privileges are personal to the "holder," only the holder may waive the particular privilege in question. Rittenhouse v. Superior Court , 235 Cal. App. 3d 1584, 1588, 1 Cal. Rptr. 2d 595, 597 (1991); Mavroudis v. Superior Court, 102 Cal. App. 3d 594, 602, 162 Cal. Rptr. 724, 731 (1980); Cal. Evid. Code Sections 953, 954. California's Evidence Code thus provides that a privileged communication is waived only upon disclosure or consent to disclose a significant part of the communication "by the holder of the privilege, *without coercion*." Cal. Evid. Code Section 912(a) (West Supp. 1994) (emphasis added). Because the Documents were stolen and/or obtained without B&W's knowledge or consent, all disclosures of the Documents were coerced, and there has been no waiver of the attorney-client or any other applicable privileges. See, e.g., KL Group v. Case, Kay & Lynch, 829 F.2d 909, 919 (9th Cir. 1987) (inadvertent disclosure by attorney does not waive client's privilege) citing American Mutual Liability Ins. Co. v. Superior Court, 38 Cal. App. 3d 579, 113 Cal. Rptr. 561 (1974) (attorney-client privilege not waived by attorney's production in response to subpoena, because production not voluntary). The same line of reasoning applies to business secrets. Mai Systems Corp. v. Peak Computers, Inc., 911 F.2d 511, 520-23 (9th Cir. 1993) (applying California law; finding trade secret protected as long as owner takes reasonable steps to keep information secret); Masonite Corp. v. Superior Court, 25 Cal. App. 4th 1045, 1050-54, 31 Cal. Rptr. 2d 173, 177-79 (1994) (broadly construing statutory provisions regarding assertion of trade secret protection, finding no waiver); Vacco Industries, Inc. v. Van Den Berg, 5 Cal. App. 4th 34, 50, 6 Cal. Rptr. 2d 602, 611 (1992) (trade secret protectable as long as it is kept secret by the party creating it); Cal. Civil Code Section 3426.1(d)(2) (holder must make efforts reasonable under the circumstances to maintain secrecy). B&W has never consented to the public disclosure or dissemination of the information contained in the Confidential Documents. Quite the contrary, B&W has acted diligently to protect this information from public disclosure and dissemination to avoid any possible prejudice to its litigation and competitive interests. That much is evidenced in its prosecution of the Kentucky suit against Merrill Williams as well as its providing of documents to Congress under the assurances of the Confidentiality Agreement. B&W has not waived any protections accorded to the Confidential Documents, and those protections remain intact. Consequently, those documents, and the information contained in them -- although in the possession of the University -- remain the property of B&W and continue to be protected by all applicable privileges. Furthermore, B&W, as owner of the documents and the privilege, is entitled to the return of Confidential Documents. 2. The University Is Wrongfully Retaining Possession Of B&W's Property. The University is wrongfully in possession of the Confidential Documents. Given the University's refusal to state from whom the Confidential Documents were obtained, it is impossible for B&W to determine the University's culpability, if any, in obtaining them.[n.~5] One thing is certain, however; the University did not receive the Confidential Documents from B&W, which is the only person authorized to disseminate them, and regardless of the University's culpability, the law of California requires that the documents be returned to B&W. Even if the University was not initially at fault in receiving the documents, the University's refusal to return B&W's property to it constitutes an impermissible and actionable interference with B&W's property rights. Krusi v. Bear, Stearns & Co., 144 Cal. App. 3d 664, 672, 192 Cal. Rptr. 793 (1983) ("action for conversion rests simply upon the interference with the plaintiff's dominion over his property. The action is a species of strict liability in which the defendant's good faith, due care, ignorance or mistake are irrelevant and may not be set up as a defense."); City of Los Angeles v. Superior Court, 85 Cal. App. 3d 143, 149-50, 149 Cal. Rptr. 323 (1978) (same); Henderson v. Security Nat. Bank, 72 Cal. App. 3d 764, 770-71, 140 Cal. Rptr. 388 (1977) ("plaintiff's right of redress [does not depend] on his showing, in any way, that the defendant did the act in question from wrongful motives, or generally speaking, even intentionally; and hence the want of such motives, or of intention is no defense.") Furthermore, the University's copy of the Confidential Documents is the fruit of a wrongful taking or wrongful dissemination and was provided to the University in contravention of law and confidentiality agreements. In the circumstances, California courts have unfailingly ordered the return of attorney-client privileged documents, attorney work product and documents containing confidential business secrets (as well as any copies thereof). For example, in Conn v. Superior Court, 196 Cal. App. 3d 774, 242 Cal. Rptr. 148 (1987), an employee in a wrongful termination suit had stolen privileged documents from his former company just prior to leaving its employ. After the employee's counsel refused to return the documents voluntarily, the defendants moved for an order, among other things: 1) compelling the surrender of misappropriated, privileged documents; 2) restraining the use or dissemination of the documents; and 3) compelling plaintiff and his counsel to make an accounting of all privileged documents in their possession and all disclosures thereof. Id. at 780. The trial court ordered the return of "all originals and all copies of such documents," as well as "any notes, records, summaries or descriptions made of such documents by Plaintiff or anyone in Plaintiff's counsel's law firm." Id. at 781. When the employee and his attorney ignored the court's order, the court found them in contempt. Id. On appeal, the Conn court reviewed and upheld the contempt order. In reviewing the contempt order, the Court of Appeal found it necessary to address the validity of the order for the documents' return. Id. at 784. The court held that the order commanding the return of the misappropriated documents, as well as all "fruits" of the documents, was within the trial court's "inherent power to control the proceedings before it and to make orders to prevent the frustration, abuse or disregard of the court's processes." Id. at 785. Over the employee's objections on attorney work product grounds, the court expressly held that the order to return the "fruits" of the documents included notes which had been made by the employee's attorneys "on and about documents which he had no right to have in the first place." Id Even in cases involving inadvertent or court-ordered disclosure of privileged documents (as opposed to the misappropriation or theft of documents seen in Conn ), the owners of privileges consistently have obtained orders requiring that documents be returned. See, e.g., Great American Surplus Lines Ins. v. Ace Oil Co., 120 F.R.D. 533, 539 (E.D. Cal. 1988) (applying California law; protective order required third party to return privileged and work product documents disclosed to opposing party pursuant to subpoena, and ordered parties, counsel and agents to "refrain from making any reference to the documents or disclosing or summarizing in any manner any portion of the documents"); KL Group v. Case, Kay & Lynch, 829 F.2d 909, 917 -919 (9th Cir. 1987) (applying California law; upholding order requiring return of all copies and written summaries of privileged letter inadvertently produced in discovery); United States v. Derr, 1993 U.S. Dist. LEXIS 11411, *5 (N.D. Cal. 1993) (ordering return of all copies of privileged documents inadvertently produced to opposing party during discovery); Falstaff Brewing Corp. v. Philip Morris, Inc., 89 F.R.D. 133, 135 (N.D. Cal. 1981) (ordering return of privileged documents retained by opposing counsel in violation of protective order); Coalition Against Police Abuse v. Superior Court, 170 Cal. App. 3d 888, 906, 216 Cal. Rptr. 614, 625 (1985) (court did not abuse its discretion in ordering the return of privileged documents subject to a protective order). California courts also have protected business or trade secrets which were misappropriated, inadvertently disclosed, or where disclosure exceeded the scope of an applicable protective order or confidentiality agreement. For instance, in McGinty v. Superior Court, 26 Cal. App. 4th 204, 212, 31 Cal. Rptr. 2d 292, 293 (1994), copies of documents containing trade secrets originally disclosed to an opposing party pursuant to a protective order were inadvertently sent to a third party. The trial court ordered the third party to return of all such documents to the holder of the business secret. Id. at 208. See also, Remington Rand v. Business Systems, Inc., 830 F.2d 1260, 1269 (3d Cir. 1987) (company ordered to return trade secrets obtained through the purchase of another company owning rights to the secrets); In re IBP Confidential Business Documents Litigation, 754 F.2d 787, 798 (8th Cir. 1985) (ordering former employee to return to employer stolen documents containing "sensitive, confidential information about... internal operations and business strategies" which had been stolen by former employee); Ecolab, Inc. v. Paolo, 753 F. Supp. 1100, 1115 (E.D.N.Y. 1991) (ordering former employees to return to employer confidential customer information, as well as all copies and abstracts thereof, wrongfully retained following their termination, including "sales and credit reports... invoices... [and] product, training, and service manuals"). In any event, the University has, at least since February 1, 1995, known that the Confidential Documents were wrongfully provided to it. See Caulfield Decl., Paragraph 2, Exhibit A thereto. B&W has fully advised it both of the nature and sources of those documents as well as of Judge Wine's order in the Kentucky action and the Confidentiality Agreement. Id. As a result, the University now knows that the documents rightly belong to B&W. Despite that, the University has not provided, and cannot provide, any reasonable justification for its failure to return the documents to B&W. Accordingly, there is more than a "reasonable probability" that B&W has a claim to possession of the Confidential Documents. In fact, B&W has the only claim to possession of those documents, and a writ of possession should issue. B. B&W Will Provide The Requisite Undertaking. It is impossible to estimate the precise value of the Confidential Documents. The courts have recognized that the unauthorized disclosure of privileged and confidential information can cause irreparable harm. See Admiral Ins. Co. v. United States District Court, District of Arizona, 881 F.2d 1486, 2490 (9th Cir. 1988); Ruckelshaus v. Monsanto, 463 U.S. 1315, 1317, 104 S. Ct. 3 (1983). Those holdings are particularly apt here, where the Confidential Documents are germane to the interests of competitors and litigation adversaries. Nonetheless, by the time of the hearing on this Application, B&W will file an undertaking in the amount of at least $1,000.00. B&W is, of course, willing to increase the amount of the undertaking if the Court so desires. C. The Court Should Grant A Turnover Order To Aid In The Enforcement Of The Writ. If a writ of possession is issued, the Court may also issue an order directing the defendant to transfer possession of the property to plaintiff. Such order shall contain a notice to the defendant that failure to turn over possession of such property to plaintiff may subject the defendant to being held in contempt of court. Cal. Code Civ. Proc. Section 512.070. Such an order permits "the plaintiff to select a more informal and less expensive means of securing possession." Law Revision Commission Comment, 1973 Addition, to Cal. Code Civ. Proc. Section 512.070. With this Application, B&W has submitted a proposed form of turnover order using the approved Judicial Council Form. It requests that the Court grant a turnover order to prevent B&W from having to incur the expense of a formal levy, which does not appear to be necessary here, in order to enforce the writ of possession. IV. CONCLUSION B&W's right to possession of the Confidential Documents is clear, and the University has no genuine interest in those documents. In addition, the University will incur no prejudice from the granting of this Application. Consequently, and for the foregoing reasons, B&W respectfully requests that the Court grant this Application and issue the requested writ of possession and turnover order in aid of the enforcement thereof. DATED: February 16, 1995 LATHAM & WATKINS Barbara A. Caulfield Myra J. Pasek By /s/ Barbara A. Caulfield Counsel for Plaintiff Brown & Williamson Tobacco Corporation ==========FOOTNOTES========== 1. This factual dissertation is set forth pursuant to Code of Civil Procedure Section 512.010(b), and incorporates those facts set forth in the declarations accompanying this Application. The pertinent subsections of 512.010(b) which correspond with the showings made herein are set forth in bold print beside the various headings. Among the showings Section 512.010(b) requires is "[a] statement that the property has not been taken for a tax assessment, or fine, pursuant to a statute; or seized under an execution against the property of the plaintiff; or, if so seized, that it is by statute exempt from such seizure." Cal. Code Civ. Proc. Section 512.010(b)(5). Obviously these circumstances do not apply to the Confidential Documents. 2. Certain of the documents held by Defendants are not confidential, and those documents are neither encompassed in the term "Confidential Document" as used herein nor the subject of this Application. See Clements Decl., Paragraph 9, Exhibits B and C thereto. 3. Members or staff of Congress did not have to give their express agreement to be bound by the Confidentiality Agreement, and were instead bound by their ethical obligations. Clements Decl., Exhibit D. The Confidentiality Agreement allowed the broader dissemination of the documents only upon the occurrence of certain events, which never occurred. Id., Exhibit D at page 3 (Paragraph 8). 4. In this action, B&W also seeks declaratory relief to obtain this information. 5. Interestingly, personnel at UCSF refer to the Confidential Documents as "the Brown & Williamson Documents," and, in fact, the documents are so labelled. See Complaint, Paragraph 7. Yet, despite the apparently unusual circumstances under which they received the Confidential Documents, and the obvious confidentiality of those documents, no one at the University contacted B&W to inquire as to whether those documents should be disseminated.
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