Armenta v. Superior Court

• Decision Date: 30 July 2002
• Docket Number: No. B157775.,B157775.
• Parties: Qui tarn plaintiff Nora ARMENTA et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent, James Jones Company et al., Real Parties in Interest.
• Court: California Court of Appeals Court of Appeals

124 Cal.Rptr.2d 273

101 Cal.App.4th 525

Qui tarn plaintiff Nora ARMENTA et al., Petitioners, v. The SUPERIOR COURT of Los Angeles County, Respondent James Jones Company et al., Real Parties in Interest.

No. B157775.

Court of Appeal, Second District, Division 1.

July 30, 2002.

Certified for Partial Publication.^* Rehearing Denied Aug. 21, 2002.

Phillips & Cohen, Eric R. Havian and Harry Litman, San Francisco, Irell & Manella LLP, S. Thomas Pollack, Gregory R. Smith and Stephen Hasegawa, Los Angeles, for Petitioners.

No appearance for Respondent.

Beck, De Corso, Daly & Kreindler, Bryan D. Daly and Marc S. Harris, Los Angeles, Wolff, Ellis & Clausen LLP and Gregory R. Ellis, San Francisco, for Real Parties in Interest James Jones Company, Mueller Co., and Tyco International (US), Inc.

Weston, Benshoof, Rochefort, Rubalcava & MacCuish, David S. MacCuish, Kurt Osenbaugh and Todd B. Benoff, Los Angeles, for Real Party in Interest Watts Industries, Inc.

INTRODUCTION

SPENCER, P.J.

Qui tam¹ plaintiff Nora Armenta and plaintiffs East Bay Municipal Utility District, City and County of San Francisco, and City of Santa Monica petition for a writ of mandate commanding the superior court to vacate its order of March 27, 2002 and enter a new and different order prohibiting most of that which the March 27 order permits real parties in interest James Jones Company, Mueller Co., Tyco International (US), Inc. and Watts Industries, Inc. to do. Petitioners contend that California law precludes real parties in interest from interviewing and retaining experts who are privy to Armenta's confidential information. In addition, they contend, Armenta has a valid work product interest in Richard Preston Maas's reports, an interest that Los Angeles Department of Water and Power's counsel had no authority to waive. For the reasons stated post, we agree and grant the petition for a writ of mandate.

FACTUAL AND PROCEDURAL

BACKGROUND

On January 31, 2001, petitioner Nora Armenta (Armenta) filed a second amended complaint for violation of the California False Claims Act (Gov.Code, § 12650 et seq.). Armenta, a former employee of James Jones Company (Jones), alleges on behalf of the Los Angeles Department of Water and Power (LADWP) and 164 other municipal water systems that Jones, Mueller Co., Tyco International (US), Inc. (Tyco), and Watts Industries, Inc. (Watts) sold the water systems water valves, fittings and other metal water distribution parts that did not meet contract specifications. The parts that Jones sold contained significantly higher levels of lead and zinc than called for in the specifications. As a consequence, lead levels in the water supply possibly could rise and the parts could degrade prematurely.

In April 1999, Armenta's counsel retained Richard Preston Maas (Maas) as an expert on lead leaching from bronze water distribution parts. In May 1999, LADWP also retained Maas. Maas thereafter served as Armenta's and LADWP's joint expert. He produced several reports and memoranda for LADWP concerning the status and results of lead leaching tests he performed. These reports and memoranda, although paid for by LADWP, addressed as well the concerns and views of Armenta's counsel.

In order to protect the work product of their collaborative relationship, counsel for Armenta and LADWP executed a joint prosecution agreement that became effective on January 1, 1999, before either party retained Maas. The agreement confirms "a mutuality of interest in a common and joint prosecution of the action." Its purpose is "to ensure that the exchanges and disclosures of plaintiffs' materials contemplated by the Agreement do not diminish in any way the confidentiality of plaintiffs' materials and do not constitute a waiver of any privilege otherwise available." The agreement expresses the parties'"intention and understanding that communications among us and any joint interviews of prospective witnesses are confidential and are protected from disclosure to any third party by our clients' respective attorney-client privilege and our own work-product privilege."

The agreement further provides that "[i]n order to pursue this joint prosecution of the action effectively we have also concluded that, from time to time, the mutual interests of our respective clients will best be served by sharing documents, factual material, mental impressions, strategies, legal theories, memoranda, interview reports, and other information, including the confidences of each client, all of which will hereinafter be referred to as `plaintiffs' materials.' In the absence of such sharing, these plaintiffs' materials would be privileged from disclosure to adverse or other parties as a result of the attorney-client privilege, the attorney work-product privilege or other applicable privileges." The agreement specifically applies to "plaintiffs' materials received from other counsel or jointly obtained by any one counsel on behalf of the other counsel." (Italics added.)

The agreement continues in effect regardless of "any conclusion or resolution of the action with respect to any party whose counsel is a signatory to this agreement or with respect to all parties. Counsel agree that they and their clients will continue to be bound by the agreement following any conclusion or resolution of the action."

Maas and counsel for Armenta consulted extensively with two other experts that LADWP retained, Exponent, Inc. and Stephen Rothenberg (Rothenberg). Exponent, Inc. analyzed the results of Maas's testing, conferred with counsel about the anticipated use of Maas's data at trial, and discussed confidential work product information about litigation theories and tactics. Exponent, Inc. prepared written reports. Rothenberg, a toxicologist retained as a consulting expert, with whom counsel discussed litigation theories and strategy, did not prepare written reports.

On October 5, 2001, LADWP sought the trial court's approval of a settlement with real parties in interest to which LADWP had agreed. Article 4, paragraph 4.1 of the settlement agreement states that "LADWP will provide to [real parties] all data, reports and studies generated or developed by or on behalf of the LADWP and its retained experts or consultants in connection with the Action, whether developed before or after the LADWP filed its Complaint-In-Intervention. The materials to be produced to [real parties] include all documents which reflect any analysis, opinions and/or data related to the LADWP and developed by or on behalf of the LADWP's experts or consultants in connection with the Action...."

LADWP took the position that it independently sought and procured test results, reports and other data produced by Maas, Exponent, Inc. and Rothenberg. In LADWP's view, these materials thus were exempt from the joint prosecution agreement, which provides in paragraph four that "nothing contained herein shall limit the right of any counsel to disclose any document or information obtained from that counsel's client or any information that has been independently obtained by such counsel." (Italics added.) Moreover, LADWP argued, inasmuch as LADWP's counsel always had represented that she intended to disclose the test results, neither party to the joint prosecution agreement could claim work product privilege in these materials. Finally, as LADWP understood the law, the California Public Records Act (Gov.Code, § 6250 et seq.) superseded the joint prosecution agreement. Petitioners opposed the motion.

At the October 31, 2001 hearing on the motion to approve the settlement agreement, petitioners disputed LADWP's assertion that it had always indicated its intent to make all test results public. Petitioners noted that the only time LADWP's counsel stated she would disclose test results, she was referring to tests conducted by LADWP personnel. In petitioners' view, there never had been any contemplation that the product of joint experts would be disclosed before the conclusion of the litigation. Petitioners would agree to public disclosure of joint experts' test results only if real parties in interest were prohibited from using the results in the litigation.

The court did not dispute that Maas's reports were covered by the joint prosecution agreement. It accepted, instead, the argument that the Public Records Act required a governmental agency settling a case to make public documents underlying the decision to settle. The court asked, accordingly, "[c]an a joint prosecution agreement trump the Public Records Act?" In the court's view, LADWP had "a responsibility to the people they represent to say, we did this because it is safe, we thought this was the way to go, and we are not jeopardizing the health of the people who reside in the City of Los Angeles by engaging in this type of settlement."

The court overruled petitioners' objections to the settlement agreement. It ruled that "[t]he information sought can be produced and may be produced." It "stayed execution on the implementation of the dissemination of that information for 60 days" to "give the interested parties an opportunity to bring a protective order motion." The court's inclination was "to permit complete dissemination of the information, but do that in the framework of timing of exchange of expert information. In other words, the information ... would be turned over at the same time the exchange of expert information and all of that comes forward."

Real parties in interest objected to delayed disclosure, in part on the ground that they were unable to duplicate the tests the experts performed. They presented their objections at a December 7, 2001 hearing on an unrelated discovery matter. The court indicated a willingness to entertain a motion for an early exchange of expert information, but reiterated that the public had "a right to know." The court ultimately modified its original ruling and ordered disclosure of LADWP's expert information "forthwith," on...