People v. Superior Court

107 Cal.Rptr.2d 323

25 Cal.4th 703

23 P.3d 563

The PEOPLE, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent;

Gary Laff et al., Real Parties in Interest.

No. S063662.

Supreme Court of California.

May 24, 2001.

Rehearing Denied June 27, 2001.

Gil Garcetti, District Attorney, Brent Riggs, Natasha S. Cooper and Patrick D. Moran, Deputy District Attorneys, for Petitioner.

Dwyer, Daly, Brotzen & Bruno, John A. Daly, Toni Rae Bruno, Los Angeles, and Benjamin A. Brin, Oakland, for Respondent.

Law Offices of Richard A. Moss, Richard A. Moss, Pasadena, and Tracy Green, Oakland, for Real Party in Interest Gary Laff.

Michael D. Chaney for Real Party in Interest Jerry Widawski.

GEORGE, C.J.

Pursuant to a warrant issued by respondent superior court, law enforcement authorities seized numerous documents from real parties in interest Gary Laff and Jerry Widawski, who are attorneys suspected of criminal conduct. Real parties in interest (hereafter the attorneys) requested that the superior court conduct an in camera hearing to determine whether any of the seized documents were privileged. The court sealed the documents and refused to proceed with the hearing unless the People, represented by the district attorney's office, agreed to pay one-half the cost of the services of a special master appointed by the superior court to review the documents. The Court of Appeal denied the People's petition for writ of mandate, which sought to compel the superior court to conduct the hearing without requiring the People to contribute to the cost of a special master. The appellate court held that Code of Civil Procedure section 639, subdivision (a)(4),¹ which permits a compulsory reference when necessary for the information of the court in a special proceeding, authorizes the appointment of a referee to assist in ruling upon the claims of privilege asserted by the attorneys. The Court of Appeal further determined that the cost of the referee may be apportioned among the parties pursuant to section 645.1, subdivision (b).² We granted review to decide whether the superior court properly refused to proceed with the hearing unless the People agreed to the appointment of a special master compensated in part by the People. In addition, we subsequently obtained supplemental briefing from the parties regarding the threshold issue whether a superior court is authorized to conduct such a hearing.

As we shall explain, we have reached the following conclusions with regard to the numerous issues presented. First, we conclude that the superior court has an obligation to determine claims of privilege regarding materials seized from the attorneys, whether or not the attorneys are suspected of criminal conduct, and that the court properly may conduct a hearing to resolve such claims. Second, although section 639 does not authorize a compulsory reference in a proceeding to determine whether documents seized from a criminal suspect are privileged (because such a proceeding is not the type of "special proceeding" to which section 639 applies), the superior court nonetheless possesses inherent authority to appoint a special master to assist it in examining such documents and ruling upon the claims of privilege. Third and finally, however, the superior court lacks either statutory or inherent power to require the parties to bear the cost of a special master's services in this context. Thus, the superior court erred in conditioning its willingness to determine the privilege claims asserted by the attorneys upon the People's agreement to pay for the services of a special master. We shall reverse the judgment of the Court of Appeal.

I

The attorneys are suspected of possible automobile insurance fraud. They have not been charged with any crime, however, and no related criminal action is pending. At the request of the fraud divisions of the California Department of Insurance and the Los Angeles County District Attorney's Office, the superior court issued warrants authorizing the search of the homes and law offices of the attorneys and the seizure of specified categories of documents. When the warrants were executed, the attorneys each asserted that the materials seized by law enforcement authorities included information protected by the attorney-client privilege and the work-product doctrine. They requested that the search be conducted under the supervision of a special master, or, alternatively, that the seized materials be removed under seal. These requests were denied, and computers and files containing voluminous documents were examined and seized by investigators.

The superior court subsequently ordered that the Department of Insurance and the district attorney's office cease inspection and copying of the seized materials, that the attorneys be afforded an opportunity to examine and copy these items, and that the files remain under seal pending further order of the court. The attorneys filed a motion, captioned "In the Matter of the Search Warrant for the Premises of the attorneys and others, requesting an in camera hearing at which the superior court would determine whether any of the documents were privileged. No opposing party was named in the motion, although the People, represented by the district attorney's office, appeared in the proceeding to oppose the claims of privilege asserted by the attorneys. The motion requested that the superior court appoint a special master to conduct the in camera inspection of the items and determine the applicability of any privilege. In support of this request, the attorneys stated that examining approximately 220 privileged files, including two computer databases, would be unduly burdensome for the court. A deputy district attorney agreed that a special master should be appointed for this purpose.

At the initial hearing on the attorneys' motion, the superior court asked the parties whether they would contribute to the cost of the services of a special master. The attorneys agreed to pay one-half of this cost. The People, however, declined to share the cost of a special master, although a deputy district attorney indicated that guidance regarding this issue would be sought from management in the district attorney's office. Soon thereafter, the People and the attorneys agreed upon the selection of a special master to be appointed by the court. When the superior court again inquired whether the People would contribute to the special master's fees, however, the district attorney's office informed the court in writing that it was "not in a position to contribute to the payment of special master fees." The superior court then issued an order to show cause why the proceeding should not be summarily dismissed. The court observed that the parties previously had stated that approximately 15 to 20 packing boxes of documents must be reviewed, and that a qualified special master reasonably would devote 80 to 100 hours to the task, at an hourly rate of $130 to $150. Thus, the cost of a special master could reach $15,000. The superior court further noted that the record indicated law enforcement authorities already had allocated substantial expenditures of time and money to the investigation that had resulted in the seizure of the documents from the attorneys.

In further briefing, the People agreed that the court has inherent authority to appoint a special master to review the seized documents, and stated that the People never opposed the court's appointment of a special master for this purpose. The People asserted, however, that the cost of a special master should be paid from county general funds pursuant to Evidence Code sections 730 and 731, which authorize the appointment and payment of an expert selected by the court to testify at the trial of an action, if the court determines that expert evidence may be required by the court or a party.

At a subsequent hearing, the People contended that the cost of a special master, if one is appointed, should be paid from the operating budget of the superior court, because the hearing to determine whether the seized documents are privileged is a judicial proceeding and a judicial function. The superior court, however, concluded that the subject proceeding would be one in aid of a continuing investigation funded by the Fraud Division of the Department of Insurance, and that therefore the cost of the special master should be paid either by the People or by the Department of Insurance. Anticipating that the People would seek appellate review of its determination, the superior court ordered that all material seized from the attorneys remain sealed pending further order of the court. In a motion for reconsideration, the People urged the superior court immediately to unseal the seized materials and to consider the special master as either an expert witness or a quasi-judicial officer, in which case the fees of the special master would be paid from either county funds or the court's operating budget, respectively. The superior court denied the motion for reconsideration.

The People sought a writ of mandate to compel the superior court to conduct a hearing to determine the claims of privilege asserted by the attorneys, and to refrain from conditioning such a hearing upon the agreement of the parties to pay the cost of the hearing. Abandoning its principal legal argument asserted in the trial court, the People contended in the Court of Appeal that there is no explicit statutory authorization for referring the matter to a special master (i.e., that Evid. Code §§ 730 and 731 do not apply), and that absent such authorization, the superior court had a duty to determine the attorneys' claims of privilege without requiring the parties to pay the cost of that determination. The superior court filed a return and answer asserting, among other things, that it has authority to appoint a referee and to allocate the cost of the reference among the parties pursuant to Code of...